Cryptocurrency crash sees man loses $650k life savings

One crypto enthusiast has lost a whopping $650,000 while another is seriously in debt after taking out a $430,000 loan to buy the coin.

Investors in a crashed cryptocurrency have told how they have lost fortunes and fear homelessness after its value plummeted by an unprecedented 98 per cent.

Terra Luna, which was among the top 10 most valuable cryptocurrencies in the world, slumped below US$1 on Wednesday, having peaked close to $120 only last month, The Sun reports.

Incredibly, the dramatic collapse occurred in the space of just 24 hours with its market cap spiralling from above US$40 billion (A$57b) to just US$500 million (A$719m).

At time of writing, the coin is trading at a pitiful US 17 cents.

The shock crash sparked holders of Terra Luna to flood to discussion site Reddit to tell of the nightmare financial ruin they were now staring down the barrel of.

One user claimed to have “lost over $450,000” in an extraordinary confession, grimly adding they ”cannot pay the bank”.

“I will lose my home soon. I’ll become homeless,” they shockingly admitted on the TerraLuna sub-Reddit.

In Australian dollars, that is an eye-watering $647,000.

The Terra blockchain has officially halted at block 7607789.

Terra Validators have halted the network to come up with a plan to reconstitute it.

More updates to come.

— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) May 13, 2022

The widespread scale of the crash was evident in other social media posts as others shared heartbreaking stories of their losses.

On Twitter, one person tweeted to the TerraLuna official page: “I bought 300,000 UST on BiKe and Binance with a loan. Now I can‘t trade or withdraw coins. How do you compensate me?”

His US$300,000 loss equates to $431,000 Australian dollars.

“I lost 90k luna and delisted in 2 exchanger. I have nothing left,” commented another.

A Reddit user claimed to have lost $15,000 after failing to sell their holdings for a substantial profit when it was trading above $100 last month.

Another down-on-their luck investor said: “I should’ve cashed out when it was $100, then I would have been up $25,000.

“But I got greedy hoping to get more money so I can at least afford a down payment for a house for my family.

“I guess no house and savings then”, they said.

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Terra Luna had crashed to 17 cents at time of writing and had dropped out of the top 10.

Yet another person revealed they had “lost around $5000” which they said was ”all my life savings”.

The user claimed to have bought the doomed cryptocurrency at $85 dollars and it the investment “was all I had”.

The sell-off came as Terra – a stablecoin – lost its peg to the U.S. dollar, wiping out the price of its support coin luna which went on to lose 99 per cent of its value.

Crypto exchange Binance temporarily suspended withdrawals on Terra (LUNA) network at one point during the collapse.

It meant that even those who wanted to sell were unable to cash in last minute as the price went into free fall.

Do Kwon, who founded Terra creators Terraform Labs, tweeted on Tuesday: “Close to announcing a recovery plan for $UST. Hang tight.”

This article originally appeared in The Sun and was reproduced here with permission.