Terra Classic Ceases USTC Minting as SEC Investigates Former CEO Do Kwon

  • The Terra Classic community has decided to halt the minting and re-minting of USTC.
  • The Terra Classic community is taking steps to re-peg USTC to USD.
  • Terra’s former CEO is facing legal trouble after SEC charges.

Terra Classic USD (USTC) will no longer be minting or re-minted, according to a recent vote by the Terra LUNA Classic (LUNC) community.

A proposal was published on September 14 that suggested the cessation of all minting and re-minting of USTC without the approval of the Terra Classic community. Moreover, the proposal suggested the elimination of “loopholes,” such as converting xUST to mint USTC.

Furthermore, the Terra Classic community has voted to pay Algo Quant, an algorithmic trading firm, to re-peg USTC to USD. USTC was an algorithmic stablecoin that lost its peg to the American dollar after its $44 billion collapse in 2022. Another term on the proposal was that the Terra Classic community would participate in the burning of USTC to facilitate the re-pug.

According to the proposal description, the proposal’s objective is to protect the community and outside investors burning USTC to help achieve the re-peg. Moreover, the proposal would open the door for institutions like Binance to start burning USTC, knowing that minting and re-minting have ceased.

The voting started on September 14 and ended on September 21. 59.42% of the community agreed with the proposal, and 37.75% opposed it.

The Terra Luna Classic community is working towards regulating the supply and demand of USTC, and it voted on a previous proposal in August that outlined strategies to achieve those objectives. The proposal suggested holding reserves in multiple assets and currencies and implementing a buyback and burn mechanism.

Meanwhile, the former CEO of Terra Do Hyeong Kwon is facing legal charges after the United States Securities and Exchange Commission (SEC) charged him with crypto asset securities fraud on February 16, 2023.

More recently, on September 22, the SEC filed a motion seeking to dispose of Do Kwon. The former CEO is currently in jail, sentenced to four months in Montenegro for attempting to travel with a forged passport.

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