What happened
In May 2022 UST lost its peg and LUNA hyperinflated. Common sourced ranges for the break are about $40 billion to $45 billion, not a precise $60 billion figure. In December 2025 Do Kwon was sentenced to 15 years in prison for fraud offences connected to the Terraform cryptocurrencies.
What failed
The peg did not have durable reserves sufficient to absorb a run.
Current status
The original UST/LUNA economic design is dead. LUNC and Terra 2.0 are not a restored peg.
What users should do
- Do not confuse LUNC or Terra 2.0 tokens with restored UST value.
Lessons
- A token that still trades can still represent a failed product.