The Luna Foundation Guard, which is in charge of maintaining the peg of UST, the Terra ecosystem’s stablecoin, has disclosed how it used the available Bitcoin reserve prior to the Terra ecosystem’s latest catastrophe. To try to keep the value of UST stable, the group sold some of the bitcoins it possessed immediately and exchanged the rest on separate dates. More than 80,000 BTC were held in the reserve.
Terra blockchain is said to have spent $3.5 billion to keep the ceiling from caving in on itself.
The Guard of the Luna Foundation Explains Backup Actions
The Luna Foundation Guard (LFG), the group in charge of maintaining the dollar peg of UST, the Terra ecosystem’s algorithmic stablecoin, has broken its silence to explain how the funds in its custody were used. The Luna Foundation Guard possessed a stockpile of 80,394 BTC, among other virtual currencies, as of May 7, 2022, according to LFG.
The institution has accumulated over 80K BTC, which would be utilized in the event of market instabilities influencing the value of the terra USD (UST).
According to social media sources, the organization used nearly all of its BTC holdings in an unsuccessful attempt to save UST. Three separate operations were used to create this. LFG sold 26,281,671 $USDT and 23,555,590 $USDC for an aggregate of 50,200,071 $UST in the first defensive transaction following the de-peg event.
The LFG further stated:
‘Transferred 52,189 BTC to trade with a counterparty, net of an excess of 5,313 BTC that they have returned, for an aggregate of 1,515,689,462 $UST.’
The peg was not recovered despite the LFG’s efforts. Terraform Labs traded the rest of the BTC reserve on May 10, when UST’s market price had reached $0.75, according to LFG. The selling of 33,206 BTC for a total of 1,164,018,521 UST was part of this deal.
Only 313 BTC remains in the Luna stockpile, indicating that the majority of the BTC possessed by the organization was used in the kicking game. other cryptocurrencies in the reserve, such as 39,914 BNB and 1,973,554 AVAX, also weren’t touched and remain in the company’s ownership. However, no good explanation exists as to how these should be used in the future.
The LFG disclosures provide light on how the Terra de-peg affair occurred and how the resources were used. Elliptic, a blockchain analytics and compliance firm, did an earlier investigation of the transactions and discovered that the majority of the cash were routed towards exchange platforms: Binance and Gemini.
“It is not possible to trace the assets further or identify whether they were sold to support the UST price,” the company said.
The recent drop in the value of Luna and other crypto has administrative hunters on the hunt. What does the future hold for cryptocurrency?
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British Virgin Island Orders Liquidation For Three Arrow Capital: Reports
According to Sky News reports, the British Virgin Islands has ordered cryptocurrency hedge fund firm Three Arrows Capital (3AC) bankrupt. This move will worsen the crypto space’s instability.
As per the allegation, associates from Teneo Restructuring in the British Virgin Islands have also been connected to managing the Singapore-based company’s bankruptcy. Recently at the start of this week, Voyager Digital announced that it had served a consent order on Three Arrows Capital.
According to the company, one of its subsidiaries sent 3AC a refusal warning for failing to pay off a debt. The debt contains 15,250 Bitcoin and $350 million in USDC, totaling approximately $660 million.
According to the study, insolvency might be a turning point for the fast-developing crypto industry’s future. Nevertheless, the initial financial consequences for Three Arrows’ creditors were unknown.
As per the previous reports, the Three Arrows Capital’s investments were quickly liquidated by crypto exchanges FTX, Deribit, and BitMEX.
Did Three Arrows Company Use Trader’s Money To Hold UST?
The failure of LUNA and UST in May has triggered a catastrophic scenario for Three Arrows company. The organization is claimed to have purchased capital from investors and invested them in the anchor protocol.
There is widespread criticism that Three Arrows neglected to notify traders of their UST holdings. The firm is accused of using counter-party money to develop a massive UST holding in anchor protocol.
So, what are your views? How bad will this update impact the broader crypto market?
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Is Terra Labs Involved in Price Manipulation With $3.6B USDT & UST? Decoding the Truth
Terra Labs may have roughly $3.6 billion in USDT and UST, as shown in a CoinDesk Korea article. According to the news source, the money could be used for exchange and DeFi price gouging or financial fraud.
Nevertheless, officials will need to verify the same with exchanges like Binance, Coinbase, Huobi, and Kucoin.
Do Kwon, CEO of TerraForm Labs, has so far declared his assets via his SNS or Terra Foundation. Among these are LUNA (Terra), UST (Terra USD), and BTC (Bitcoin). In the event of UST (Terra USD) collapse, the company was expected to safeguard prices with the currency owned by them.
On the other hand, on-chain data analysis indicated that TerraForm Labs and Luna Foundation Guard (LFG) wallets also had a substantial quantity of money from unidentified resources.
The entire amount of illegal funds found throughout this way totaled $3.6 billion. This also includes UST (Terra USD) and USDT (Tether). The funds has been used to influence markets and commit fraud for the present LUNC (the old LUNA) on DeFi and regulated exchanges, according to the investigation.
Once that Terra project went down on May 7, blockchain security firms Uppsala Security and Coindesk Korea, with the help of on-chain data forensics, investigated how the network went down.
Investigators tracked the movement of money towards a wallet that multiple analysts have claimed as the source of the Terra crash. 0x8d47f08ebc5554504742f547eb721a43d4947d0a is the wallet address.
As a result, it confirmed that Terraform Labs and Luna Foundation Guard had moved $7.4 billion in USDT, USDC, and UST into two Binance wallets. On-chain data was utilized to prove that the wallet was held or managed by (LFG).
Uppsala Security and CoinDesk Korea conducted further on-chain data analysis to track the passage of unknown funds valued at around $3.6 billion. Now there is unexpected evidence of UST collapse.
On May 6, a day before LUNC fell, 300 million USDTs (approximately 380 billion Won) were placed into an unidentified LFG exchange wallet, which was later discovered to have fled to another Binance Exchange Wallet.
This money can no longer be tracked via on-chain data analysis since it was moved from the exchange wallet.
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Hedge Funds Working to Systematically Destroy USDT’s Liquidity: Tether CTO
Today, Paolo Ardoino, Tether’s Chief Technology Officer, responded to what he described as “public and planned” attacks against USDT by several hedge funds. He stated that they might have done this to propagate more FUD in the aftermath of TERRA/LUNA’s demise.
Are Hedge Funds “Sacred Heroes”?
USDT’s claim to be the most stable coin linked to the US dollar has recently been questioned. Recent developments, such as a new priority for USDC and USDT’s continual depeg, have aroused suspicions in the cryptocurrency world.
Paolo Ardoino describes the mechanics of the “public attacks” on USDT in a lengthy conversation on Twitter, claiming that hedge funds have worked to destroy USDT liquidity by short-selling extensively and further re-purchasing at a discounted cost.
He further stated that the hackers have not stopped their assaults yet.
Tether’s treasury bills commitment has been decreased from $45 billion to $8.4 billion, according to Ardoino. However, he underlined Tether’s continued support and took a dig at hedge funds that have previously struggled, claiming they are seen as “sacred heroes” in the business
Challenges Are Inevitable For Any New Industry
In an interview with CNBC, Reeve Collins, co-founder of Tether and CEO of BLOCKv, described the budding DeFi market, adding that challenges are inevitable whenever a new industry emerges. He also addressed FTX’s recent rescue of certain struggling crypto startups.
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