Before assuming his PM office, Spajic, a crypto entrepreneur, invested $75,000 in Terraform Labs in 2018. He acquired 750,000 LUNA tokens at 10 cents each, and at its peak, LUNA’s value soared to $199 per token, potentially making Spajic’s investment worth over $140 million. It is suspected that he sold some of his holdings before the collapse, profiting from his investment.
This connection raises questions about why Do Kwon, the founder of Terraform Labs, sought refuge in Montenegro while attempting to evade prosecution. Spajić has not previously asserted himself as a victim of the LUNA crash. While this revelation does not definitively prove any wrongdoing on Spajic’s part, it certainly adds an intriguing dimension to the unfolding saga involving Kwon and Terraform Labs.
As part of the agreement, the company will halt its operations, and Kwon will receive a permanent ban from the cryptocurrency industry. The company had halted customer withdrawals just before filing, leaving many investors unable to access their funds. Financial troubles exacerbated by the TerraUSD and Luna collapse led Celsius to suspend withdrawals for hundreds of thousands of customers in June 2022.
The company has since faced fraud investigations and allegations of mishandling customer accounts. In July 2022, Three Arrows Capital, a crypto hedge fund known for its aggressive investment strategy, contributed to the broader market downturn. In November 2022, BlockFi filed for bankruptcy, citing a liquidity crisis linked to its reliance on a $400 million credit line from the now-bankrupt FTX exchange.
As one of the largest and most well-known crypto exchanges, FTX’s bankruptcy proceedings have resulted in over $500 million in fees for its lawyers and advisers, with total costs soaring to $700 million. In February 2023, crypto mining company Core Scientific also filed for bankruptcy, struggling with declining cryptocurrency prices and rising energy costs. These bankruptcy cases have highlighted the crypto industry’s complex legal issues, raising concerns about the lack of regulation and transparency and the risks investors face.