Terra’s LUNA jumped 28% in a week, while Terraform Labs is suing the SEC

terraform terra luna SEC
“SEC Headquarters” by Securities and Exchange Commission is licensed under CC BY-NC-SA 2.0

Key Takeaways:

  • Terraform Labs (TFL), the company behind Terra and Mirror Protocol is suing the US Securities and Exchange Commission over improperly issued subpoenas.
  • Stablecoin issuing protocol Terra’s governance token LUNA soared 28% in a bullish pattern.

YEREVAN (CoinChapter.com) – Terra’s LUNA surged in the previous week, gaining 28% and stealing the spotlight from larger cryptos. However, Terraform’s lawsuit against SEC also contributed to LUNA’s limelight. In detail, the company filed the lawsuit on Oct 22, almost a month after the initial incident.

During Messari’s Mainnet conference, the law enforcement agency publicly served the TFL CEO Do Kwon with subpoenas. In hindsight, a subpoena is a written order to compel an individual to give testimony on a particular subject. In the case of Mr. Kwon, those papers concerned Mirror Protocol, which the SEC took issue with.

The CEO claimed that the SEC went against their own due process clause, which demands formal matters to be kept confidential until stated otherwise by the institution. In hindsight, Mr. Kwon had previously met with the SEC lawyers in May to discuss the Mirror Protocol.

The executive allegedly answered their questions and agreed to hand out certain documents on the matter. However, the SEC decided to issue subpoenas amid the discussions, which did not sit well with Mr. Kwon. Nevertheless, he noted in a recent interview that working with regulators is essential and that we are currently at a “pivotal point” for crypto and fiat finance.

The commotion around the lawsuit could have contributed to Terra’s uptrend in the previous week.

Also read: Terra (LUNA) logs 40% in 2 days; 3 reasons behind the rally.

LUNA daily chart

The digital asset has been trading in a pattern dubbed the Ascending Triangle for the past two months. The upper trendline of the triangle is horizontal and caps the breakout attempts. The lower ascending trendline connects the higher lows and prevents sharp declines.

The Ascending Triangle is a continuation pattern. As it followed a whopping 651% rally, the formation predicts a further LUNA price uptrend. Moreover, the relative strength index (RSI; momentum indicator at the bottom of the chart) remained strong and charted above 50.

In hindsight, an RSI between 50 and 70 indicates the traders’ confidence in the asset. Thus they could choose to invest in Terra, as it could provide high yields.

LUNA in an ascending triangle. Source: LUNAUSD on TradingView.com
LUNA trading in an ascending triangle. Source: LUNAUSD on TradingView.com

The upcoming sessions will show if Terra’s token can keep the uptrend and reach new all-time highs.

Also read: LUNA hits all-time high as Terra’s cross-chain interoperability upgrade Columbus-5 goes live.

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