Stable coins were supposed to be “stable”. Then came the collapse

On Twitter and Reddit, Luna and TerraUSD investors who tried to assess their losses after the dramatic crash of cryptocurrency last week were stunned.

The cryptocurrency took a hit as Terra — a supposed “stablecoin” that was supposed to hold the $1 price point — lost its peg, and the Luna cryptocurrency plunged 99% in a matter of days. Taken together, cryptocurrency has dumped tens of billions of dollars. Among the investors in Terra and Luna, the so-called LUNAtics, a clear sense of panic began.

The moderators of the subreddit pinned the National Suicide Prevention Lifeline to the top of a page where users wrote tragic posts about their losses.

“For anyone who is panicking, here are some national helpline numbers,” the mediators post read.

One user wrote, “My ex-boyfriend attempted suicide,” claiming that the friend put his living savings into cryptocurrency and Luna. “If you feel pain and think your life is miserable without money, you feel like failures and things…just come to the people you love.”

Another wrote, “I lost more than 450,000 US dollars, and I can’t pay the bank.” They did not specify whether their losses were from Tira or Luna.

Other users tried to calm desperate posters, with one telling them, “You’ll get through this. We’re all going to do this. The most important part is not to give up.”

Even with Luna and Terra still running, no new posts were made to the subreddit, likely due to moderators shutting down the site.

This was also true for the separated group Servant of Discordwhere mods closed chat rooms “so new people can’t come and post FUD [fear, uncertainty and doubt] & Mislead. “
Also on Twitter, 29-year-old Kevin Soni’s talk Tweet topic About his personal experience with cryptocurrency losses and a suicide attempt spread.
Sony web3 comedian From Los Angeles, he describes himself as a suicide survivor. He said he attempted suicide after losing hundreds of thousands of dollars in crypto last summer. Now, Sony is a mental health advocate who says he feels a responsibility to guide crypto investors through massive losses.

“I just wanted to show people some perspective,” Sonny said, “like, ‘Hey, I was in a very similar situation to who you are today last year.’” As much as I wanted to give up, I didn’t and… I’m fine now. I’m the best ever.”

For Sonei, the fall of one of the most valuable stablecoins – assets that have been promoted as stable investments – is particularly destabilizing for the crypto pool.

“If people don’t have faith in stablecoins, what can they trust in crypto?” Sony said.

An influencer from Luna using Twitter handle”DeFi wolf, told CNN that before the crash, about 90% of his net worth was tied up in Luna and Terra. The investor, who said he did not want to be identified publicly due to security concerns, described the incident as a “nightmare.”

“I don’t think anyone, [including] I once thought it was possible to lose that much money in a stablecoin. I think this is the biggest surprise.”

In the Terraluna community, many fans are excited. And while one might think the Wolf of DeFi would be disappointed having lost what he says was almost all of his life savings, he says he is still proud of LUNAtic.

“I haven’t lost that much money in a few days of my life. I hope I never do it again. But I invested in a vision,” he said. “I’m 100% sure I’ll do it all again. I can look in the mirror and that’s fine. It’s been an honor to be part of the community. I will never leave the community.”

conspiracies

While some sank into despair over Luna’s collapse, others stuck to baseless online conspiracy theories about the involvement of BlackRock hedge funds and Citadel Securities in the collapse. Citadel became enemy No. 1 among the meme investment crowd after GameStop went short in 2021, and its CEO Ken Griffin bid on a group of crypto investors for an original copy of the US Constitution.

BlackRock and Citadel have denied to CNN that they were involved in Luna’s crash.

A Citadel spokesperson told CNN: “Citadel has not been involved in, or trading in, stablecoins, including Terra UST.”

“Rumors that we played a role in the collapse of the underground tanks are categorically false. In fact, BlackRock does not trade in the underground tanks,” BlackRock wrote on Twitter.

Gemini, a crypto exchange has also been cited in the rumors as well He denied he was involved.

Whale watching

Do Kwon, CEO of Terraform Labs – the company behind Luna and Terra – has tweeted a message to the “Terra community,” outlining a recovery plan.

“I understand that the past 72 hours have been very difficult for all of you – know that I am determined to work with each and every one of you to overcome this crisis, and we will build our way out of this,” he wrote on Twitter.

Kwon wrote, “Tera’s return to form will be a sight worth watching.” “We’re here to stay. We’ll keep making noise.”

Kwon was scrutinized for After tweeting earlier that some of Luna’s critics were “poor”. Tira did not respond to CNN’s request for comment.

Luna’s other prominent supporters were silent.

One of Luna’s most prominent supporters was Mike Novogratz, founder and CEO of crypto fund Galaxy Digital. he is famous tweet a picture who tattooed the wolf “Luna” in January and inflated the cryptocurrency for months to more than 457,000 followers on Twitter.

As of Monday afternoon, he had not tweeted about the coin’s collapse or responded to CNN’s request for comment.

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