The Terra (LUNA/USD) price bounced back as the rest of the cryptocurrency industry rebounded and as investors reflected on the new lawsuit filed by Terraform Labs. The LUNA price is trading at $42, which is slightly above the weekend low of $39.95. It has a total market capitalization of more than $17 billion while UST, its stablecoin, is valued at more than $2.7 billion.
Terraform lawsuit against the SEC
The relationship between the Securities and Exchange Commission (SEC) and cryptocurrencies is not doing well. In a statement, Terra’s founder said that he had been subpoenaed by the SEC. And in a statement on Friday, the company said that its CEO and the firm were contesting the subpoenas issued by the regulator.
The lawsuit centers on the Mirror Protocol, currently the third biggest DeFi platform built using Terra’s platform. According to DeFi Llama, Mirror has a total value locked of about $1 billion. It is relatively smaller than Anchor and Lido, which have a TVL of $4 billion and $3 billion.
Mirror is a DeFi platform that allows people to trade synthetic assets that track a variety of assets like stocks, real estate, and even shares. The SEC argues that the Mirror Protocol is offering unregistered securities to traders. In the lawsuit, Terra said:
“In addition to violating its rules regarding service, the SEC’s conduct here violated its rules requiring it to keep formal orders of the investigation confidential.”
Terraform, the parent company of Terra, said that the lawsuit was also misguided. For one, the company is not the developer of the Mirror protocol. For example, the SEC cannot file a lawsuit against Apple for what app developers have created.
The SEC has also sued Terraform because of its stablecoin that is known as UST. The UST is not backed by real cash. Instead, it is backed by LUNA, its cryptocurrency.
LUNA price prediction
The four-hour chart shows that the Terra price has made a strong recovery in the past few days. It has risen by about 25% from its lowest level this month. The coin has also jumped above the 25-day and 50-day moving averages while the MACD has moved above the neutral level.
The coin appears to be forming what looks like a cup and handle pattern. Therefore, the LUNA price will likely keep rising as bulls targe the all-time high of $50.
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