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Will TerraLuna survive or become a great target for scammers?

Will TerraLuna survive or become a great target for scammers?
  • Industry News
  • crypto
  • cybersecurity

24 May 2022

Things are not going great for Terraform Labs – the parent company of Luna and UST. The promising altcoin has lost $40B. It sent a shockwave around the crypto world. Thousands of day traders and some wealthy investors have said goodbye to their assets. Terra’s co-founders, Do Kwon and Shin Hyun-sung, were accused of fraud and may face imprisonment. The company’s top three lawyers, Marc Goldich, Lawrence Florio, and Noah Axler, resigned on May 16th. Watchdogs across the world are eyeing new regulations. Yet, despite all the frenzy, Terra might still have a chance for rebirth.

What is happening to Terra right now?

Binance chief executive Changpeng Zhao admitted that Terra “was built on a self-perpetuating, shallow concept.” Incentives to attract new users, such as the promised staking with a 20% yield, grew way faster than Terra’s ecosystem.

Despite all the flaws, people still believe in the revival of Luna and UST. Some enthusiasts wanted to reduce the supply of Luna hoping it will bring the price back. They burnt 280 million Luna in 2,500 transactions. With a total supply of 6.9 trillion, this is a drop in the ocean. Even Kwon does not think burning is a good idea.

Terra may repeat the fate of many other dead coins, such as BCC, ARNX, VEGCOIN, STO, and 0xBTC. Yet, it is likely to continue floating for now because it is quite popular in the media and has a very loyal fanbase. The Terra community has voted for the creation of a new network. Terra 2.0 will drop UST in favor of USDT and USDC. On May 27th, the new Luna coin will be airdropped using a flexible rate to pre- and post-crash Luna and UST holders.

Scammers and hackers are preying on the victims of Terra’s fall

The ambiguity surrounding Terra’s rebirth has created favorable conditions for scammers and hackers. Hoping for a miracle, many day traders and crypto enthusiasts become vulnerable to new exploits. Scammers and hackers have increased their phishing activity.

In the case of Luna, the most widespread scam right now is a fake burn address. Scammers edited the address in the original tweet by Kwon and spread it across all platforms. One of such addresses now has 2.1 trillion Luna and 507 million UST. Another address has amassed 1 billion Luna. The exact value of the stolen funds will be determined on May 27th when a new Terra network will be formed. These scammers hope to collect all the Luna that people want to burn. 

How can investors protect their assets from such scams?

Scammers create fake channels on Discord, Twitter, and Telegram. They brand them as the new Luna or UST. They edit addresses in real tweets. Messages follow the same pattern. They all call for urgency: be among the first to click the link, allow the transaction, and earn tremendous rewards. Victims either buy empty coins or transfer their existing assets to scammers.

The first recommendation is not to burn your coins, it only increases the risk of sharing sensitive information with scammers. The next recommendation is to be very cautious of screenshots, especially when they include addresses. It is better to find the source yourself and check the credibility of the sender.

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