Experts from Elliptic, a private company specializing in crypto-currency investigations, reported that $3.5 billion worth of bitcoins, acquired by the creators of the collapsed cryptocurrencies Terra and Luna, were withdrawn to two crypto-exchanges, following which they disappeared without a trace, and it is not possible to trace their further fate.
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The fate of the Terra reserve fund might become a key issue if crypto investors try to recoup the losses incurred as a result of the collapse of the blockchain. Elliptic found that the Luna Foundation Guard (LFG) purchased $3.5 billion worth of bitcoin between January and March. will be used to buy Terra in order to stabilize the cryptocurrency and maintain its peg to the dollar. But literally the next day, the crypto wallets in which these funds were stored were devastated.
Approximately $1.7 billion worth of bitcoins were transferred from LFG wallets in two transactions to a new address on May 9, the same day Terra co-founder Do Kwon announced that the funds would be used to correct the exchange rate. A few hours later, the entire amount in several transactions was sent to one account on the Gemini crypto exchange, and from that moment it became impossible to track the further fate of the assets, Elliptic reported.
The authors of the investigation also said that the bitcoins remaining in the reserve fund the next day, May 10, went to the account of the Binance crypto exchange in one transaction. Their further fate is also unknown: the funds might be exchanged for money or distributed to other wallets.
Recall that the stablecoin Terra from the very beginning was not backed by money or securities – its rate had to be supported by an algorithm that, when the rate fell, issued “coins” of the related cryptocurrency Luna. However, on May 9, Terra quotes began to decline sharply, and the algorithm did not help: Luna went into hyperinflation and in a few days fell in price from $85 to $0.005. The “Plan B” for the project was a reserve fund in bitcoins, but its fate is now unknown.
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