In May 2022, a top-10 crypto went from $119 to basically zero in under a week. Roughly $45 billion evaporated. If you've ever asked what happened to Luna crypto and wanted a real answer — not a textbook — here it is in six pictures.
No jargon. No charts that need a finance degree. Just doodles.
The whole story in one line: LUNA peaked near $119 on April 5, 2022, and was worth fractions of a cent by May 13.
Terra ran two tokens. UST was a "stablecoin" — meant to always equal $1. LUNA was the free-floating coin propping it up.
The trick: you could always swap $1 of UST for $1 of LUNA, and vice versa. A trading mechanism, not real dollars in a vault.
UST and LUNA were bound by code, not cash. That rubber band only works while everyone stays calm.
Why did anyone hold UST? A protocol called Anchor paid ~20% yearly interest on it. Twenty percent. On something marketed as "stable."
That number pulled in billions. It also meant the whole thing only worked while new money kept flooding in.
A ~20% yield on a "stable" asset isn't a reward — it's a warning light.
On May 7, 2022, large holders pulled $375 million of UST out of Anchor. UST slipped below $1 — to $0.98, then $0.95, then $0.90.
Panic spread. Everyone tried to swap UST for LUNA at the same time.
A peg holds on confidence alone. Once the crowd runs, the math runs with them.
Here's the trap. Every UST swapped for LUNA printed brand-new LUNA. More LUNA flooding the market crushed its price. A cheaper LUNA made UST even harder to rescue.
More selling. More printing. More crashing. A loop with no brakes.
The "death spiral": rescuing UST minted endless LUNA, and endless LUNA made LUNA worthless.
By May 13, 2022, LUNA traded around $0.0003 — a drop of more than 99.99%. UST, the "$1" coin, bottomed near $0.02. About $45 billion in value was gone in a week.
Founder Do Kwon was later extradited to the US, pleaded guilty to fraud, and in December 2025 was sentenced to 15 years in prison.
An "algorithmic stablecoin" with no real reserves had no floor. When trust left, so did everything else.
Luna is the cautionary tale every crypto holder tells at 2am. Our Luna collection turns that story into Sharpie-doodle streetwear — the death spiral, the 20% bait, the whole mess on a premium tee.
Different flavor of chaos? See what happened to Solana or get Ethereum explained simply.
Browse the Luna collection → No pitch. Just merch that gets the joke.
What happened to Luna crypto? In May 2022, the Terra/LUNA ecosystem collapsed. LUNA fell from ~$119 to fractions of a cent in under a week, wiping out roughly $45 billion.
Why did Luna crash so fast? Its stablecoin UST lost its $1 peg. The rescue mechanism printed unlimited new LUNA, triggering a "death spiral" that crushed both coins.
What is UST and why did it fail? UST was an algorithmic stablecoin meant to equal $1. It wasn't backed by real dollars — only by trading against LUNA. When confidence broke, the peg broke.
What happened to Do Kwon, Terra's founder? Do Kwon was extradited to the US, pleaded guilty to fraud, and was sentenced to 15 years in prison in December 2025.
Is Luna crypto the same coin today? No. After the crash, a new "Terra 2.0" chain launched with a fresh LUNA token. The original is now labeled LUNC (Luna Classic).
Mr. Lined makes crypto-culture streetwear — playful, premium, and proudly self-aware. Explore the full collection at mrlined.com.
