The value of the TercoUSD stablecoin fell sharply on Monday when the creator of the cryptocurrency announced a plan to try to save the project.

According to CoinMarketCap, the price of TerraUSD, created to maintain the value of the dollar, fell by 36% to 11 cents. The volume of trades in the last 24 hours was less than $ 400 million compared to the volume of more than $ 5 billion he saw last week.

TerraUSD’s market value fell to $ 1.3 billion from nearly $ 19 billion earlier this year.

Last week, TerraUSD collapsed amid a wider sell-off in the market, falling well below $ 1. The collapse put pressure on the price of bitcoin and other cryptocurrencies and erased the value of a related TerraUSD token called Luna. As a so-called algorithmic stablecoin, TerraUSD used Luna to keep the price at $ 1.

According to CoinMarketCap, Luna traded up 15% to $ 0.0002 on Monday. Its total market value on Monday was about $ 1.4 billion, according to CoinMarketCap. Earlier this year, Luna reached $ 41 billion.

On Monday afternoon, Do Kwon, the token’s founder, outlined what he called Terra’s revival plan. The essence of the plan included what in the program plan is called “fork” – basically takes the existing code and starts first with an updated version.

The new version will end the algorithmic stablecoin and distribute 1 billion tokens of the new version of Luna to existing owners and developers of Luna and TerraUSD.

Also Monday, the nonprofit Luna Foundation Guard, which controlled a reserve fund that supported stablecoin, outlined the remaining reserves left after the collapse of TerraUSD. Among its assets, the group has 313 bitcoins worth about $ 9.3 million at current prices.

On May 7, it contained 80,400 bitcoins worth about $ 3.5 billion. The fund sold most of the bitcoins to protect the TerraUSD peg, the group said.

Overall, the group said it has assets of about $ 106 million that it will use to compensate other TerraUSD owners, starting with the smallest owners. It does not specify how this compensation may work.

These steps did not have much effect on extensive cryptocurrencies. According to CoinDesk, none of the top 20 cryptocurrencies rose on Monday afternoon. Bitcoin fell 1.8% to $ 29,737 and ether fell 3.1% to $ 2,021.

The decline in cryptocurrencies has attracted the attention of Biden administration regulators, who have sought to develop policies to manage asset classes.

“The fact that we have this market crash because of one stablecoin … should be a lesson in what could potentially happen,” said Rostin Bennam, head of the Commodity Futures Trading Commission, in an interview with CNBC. Monday. He referred to the potential for “impact on traditional assets and traditional markets”.

Gary Hensler, chairman of the Securities and Exchange Commission, warned investors Monday that cryptocurrencies are a “highly speculative asset class” in which there is no disclosure of information provided by issuers of stocks or loans.

Write Paul Vinha at paul.vigna@wsj.com

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source by [author_name]

Previous articleMavs forward Reggie Bulak is an NBA Social Justice Award finalist
Next articleFutures on stocks are flat after S&P, Nasdaq started the week in the red