China Backed Publication: Terra LUNA Crash Vindicates Country’s Ban on Crypto-Related Activities

An op-ed nonfiction published successful the state-backed Chinese work Economic Daily, has suggested that the caller clang of the Terra blockchain’s LUNA and the de-pegging of the UST stablecoin vindicate the Asian country’s determination to prohibition crypto-related activities. In the article, the writer names the involvement complaint hikes by the U.S. Federal Reserve and the buying and selling of crypto assets by respective concern giants arsenic the causes of the caller marketplace crash.

Impact of Recent US Interest Rate Hike

An writer penning for China’s state-backed publication, Economic Daily, has argued that the caller clang of Terra’s LUNA and the de-pegging of the UST stablecoin vindicates his country’s determination to artifact oregon prohibit virtual currency-related activities. The author, Li Hualin, besides claimed that China’s “decisive” and “timely” enactment helped to “extinguish the ‘virtual fire’ of virtual currency speculation and enactment ‘protection locks’ connected investors’ wallets.”

As reported by Bitcoin.com News, Terra blockchain’s autochthonal token LUNA’s troubles started aft the network’s different project, the algorithmic stablecoin UST, mislaid its peg against the U.S. dollar. Initial efforts to rescue the stablecoin precipitated the autochthonal token’s plunge from a terms of implicit $87 connected May 4, 2022, to a existent terms of conscionable nether $0.0003.

While immoderate crypto experts person placed the blasted for the token’s clang connected the actions of the project’s leader, Do Kwon, successful the opinion piece, the Chinese writer appears to property the token’s autumn chiefly to the raising of involvement rates by the U.S. Federal Reserve. Explaining however the complaint emergence caused the token to plummet, the writer wrote:

Since the opening of this year, the Federal Reserve has launched an involvement complaint hike cycle, and planetary liquidity has tightened. Especially successful aboriginal May, the Federal Reserve raised involvement rates by 50 ground points astatine a time, which had a antagonistic interaction connected superior and marketplace sentiment, and virtual currencies were the archetypal to carnivore the brunt.

Virtual Currency and the Chinese Law

Following the clang of the 2 Terra tokens, immoderate wrong the crypto assemblage are still trying to portion together what whitethorn person caused the spectacular collapse. However, others person already accused 2 firms, Blackrock and Citadel, of being down LUNA’s woes. These allegations person been rejected by the firms.

The Chinese author, successful the meantime, claims successful the portion that the engagement of concern giants successful crypto markets “can pb to convulsive fluctuations successful currency values, triggering a ample fig of sell-offs.”

Hualin besides reiterated that virtual currency transactions are not protected by Chinese law. These comments look to contradict the caller Shanghai High People’s Court judgment affirming bitcoin to beryllium a virtual plus protected by Chinese law.

The writer ends the nonfiction by urging investors to “remain rational, promptly destruct the greed of bottom-hunting and get affluent overnight, and enactment distant from related trading speculations, different it is precise apt that ‘currency volition spell to the fortune.'”

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