Do Kwon's trial is coming up, with $1.8 billion in the black market betting on the "stablecoin king's" verdict

The Disaster Turns into a Gambling Game

As of December 11, the token trading data for LUNA presents a strange picture. No positive ecosystem news, no technical upgrades, but the 24-hour trading volume of LUNA ( across all pairs including LUNA and LUNA2) has hit the $1.8 billion USD mark, ranking just behind HYPE with $1.88 billion USD. This is among the top 10 exchanges in the market, but not because of strong fundamentals, rather due to… an impending legal event.

The deep negative funding rates of -0.0595% and -0.0789% reveal the true nature of the game. It’s a battle between relentless short sellers and major capital flows pushing the price back up. LUNA surged 150% last week, but not because of founder statements, major partnerships—only because tomorrow is the day of judgment.

12 Years or 5 Years: Betting on the Future

On December 11, in courtroom 1305 of the Southern New York Federal Court, Do Kwon will face his final sentencing. Ending a long escape, the Terra co-founder pleaded guilty in Manhattan in August, admitting to securities fraud related to the 2022 Terra collapse.

The key point: it’s not about whether he is guilty or not, but about the length of the prison sentence.

Prosecutors propose 12 years. The reason is clear—the Terra collapse caused damages of tens of billions of USD, along with fraud related to the Chai payment app. Twelve years in the crypto cycle means forever, having gone through three market cycles. If so, logically, LUNA should return to zero.

The defense requests 5 years. They emphasize the long detention in Montenegro, cooperation attitude, and actions taken under SEC sanctions. The 7-year gap is enough to create uncertainty, and this uncertainty is enough to generate profit.

The market is clearly betting on that gap. High-frequency traders don’t need to believe Do Kwon will get off lightly—they just need to exploit the panic of short sellers to push the price up, then take profits before the news is officially announced.

From Victims to Asset Swap Game

Let’s go back to May 2022. The LUNA position chart at that time painted a tragic picture: thousands of small Korean investors lost everything, crypto funds bleeding, bottom-fishers buried. The market was flooded with anger, despair, trying to irrationally save itself.

Three years later, the microstructure has completely changed. The victims from back then have long since left. Now, a new force faces us: high-frequency trading funds, speculators hunting for “extreme trash,” and event hedge funds.

For them, whether Do Kwon is guilty or innocent doesn’t matter. Whether Terra has a future or not doesn’t matter either. The only thing that matters is Event Beta—the sensitivity of the price to specific legal news.

LUNA is no longer a token with solid fundamentals. It has become a derivative tool revolving around the court, like meme coins that fluctuate with a celebrity’s tweet. The fundamentals are dead, but legal shocks can still move the price for hours. The crypto market has evolved to the point where everything can be priced: emotions, news, memes… and of course, a person’s freedom.

After the Event, What Will Happen?

5 years or 12 years, the outcome will probably be similar for LUNA as a trading instrument.

If the sentence is harsh, the basic logic returns, and the price heads to zero. If the sentence is light, good news is already reflected in the price—then it’s Sell the News, and the capital will rush out like a tide.

LUNA is a perfect mirror to observe a fully matured crypto market. Whether it’s a dead coin or a failed product, as long as there’s some news value left, it can be packaged into a betting chip with extremely high trading performance. This market no longer asks “is it worth it,” but only “do you have money to play?”

Moral judgment seems unnecessary now. Do Kwon will spend sad years in prison, but the crypto market only has unpriced volatility, no sadness.