LUNA Drops 21.84% in 24 Hours as Legal Action Targets Do Kwon

LUNA Price Swings Amid Legal Developments

On December 7, 2025, LUNA experienced a sharp 21.84% decline within a single day, dropping to $0.1076. Despite this, the token had surged 46.98% over the previous week and climbed 44.74% in the past month, though it remained down 74.8% compared to the same time last year.

Impact of U.S. Legal Proceedings on Market Activity

LUNA’s value soared by over 39% in just 24 hours on December 6, following news that U.S. prosecutors were seeking a 12-year prison term for Do Kwon, the co-founder of Terraform Labs. Kwon is currently facing trial in Manhattan, accused of orchestrating the $40 billion collapse of the Terra ecosystem in 2022. This event led to Terra USD losing its dollar peg and caused significant losses for LUNA and related tokens.

Prosecutors characterized Kwon’s alleged fraud as exceptionally severe, arguing for a lengthy sentence. Interestingly, rather than dampening enthusiasm, these legal developments appeared to fuel speculative trading in Terra-linked assets.

Terra Luna Classic also saw a dramatic price increase, jumping from around $0.000028 on December 4 to nearly $0.00008 by December 6, before settling near $0.00006. During the same period, LUNA’s price nearly doubled from just above $0.07 to close to $0.15, reflecting a surge in trading volume.

Heightened Volatility Amid Legal Uncertainty

After rebranding LUNA in 2022, Do Kwon has admitted guilt to charges brought by the U.S. Department of Justice. While his legal team has requested a five-year sentence, prosecutors continue to push for up to 12 years. The sentencing is scheduled for December 11, and an agreement has been reached that would allow Kwon to serve half of his sentence in South Korea if convicted.

Market analysts believe the ongoing legal saga has sparked a short-lived rally, as some investors speculate on the future direction of the Terra ecosystem. Many traders are using this period of uncertainty to position themselves ahead of possible regulatory or market shifts.

Legal Events and Broader Market Trends

The downfall of Terra in 2022 sent shockwaves through the cryptocurrency sector, affecting rival platforms and investors alike. Do Kwon’s arrest and the subsequent court case have become a focal point in the industry, potentially setting a precedent for future legal actions against prominent crypto founders.

Beyond LUNA, other tokens associated with failed or restructured crypto projects also posted significant gains. USTC, for example, jumped over 78% in a single day, while LUNC and FTT rose by more than 19% and 18%, respectively. These moves highlight a wider speculative interest in assets tied to distressed crypto ventures.

Investor Sentiment and Future Prospects

Although LUNA suffered a steep decline on December 7, its performance over the past month has been notably strong, with a 44.74% increase since November. However, the token’s value remains significantly lower than a year ago, reflecting ongoing challenges.

Experts anticipate that upcoming legal milestones, such as the December 11 sentencing, could continue to drive short-term price fluctuations. Nevertheless, there are currently no official forecasts regarding LUNA’s long-term outlook or the broader impact on the crypto market.

Conclusion

The Terra ecosystem has experienced heightened volatility following the U.S. prosecution’s sentencing request for Do Kwon. While LUNA endured a sharp drop on December 7, recent weeks have been marked by speculative trading and price rebounds. The outcome of the legal proceedings is expected to remain a key factor influencing investor sentiment and market dynamics in the near future.