Cryptocurrency Crash: 3.5 Billion Worth Bitcoin Reportedly Wiped Out To Defend & Support Terra
The global crypto mayhem last week wiped out Bitcoin worth $3.5 billion -- created to defend and support the TerraUSD (UST) stablecoin which saw a total crash -- and no one has any idea how such a large sum of funds disappeared.
New Delhi: The global crypto mayhem last week wiped out Bitcoin worth $3.5 billion -- created to defend and support the TerraUSD (UST) stablecoin which saw a total crash -- and no one has any idea how such a large sum of funds disappeared. Nearly 80,394 Bitcoin worth $3.5 billion were purchased by the Luna Foundation Guard, the non-profit organisation set up to promote the growth of the Terra ecosystem this year, according to Blockchain analytics firm Elliptic. Cryptocurrency prices in India today (16 May 2022).
CoinDesk reported that while untold billions in value and wealth were lost when those reserves proved inadequate to prevent a "depegging" last week, what no one knows is what happened to those reserves and where they are now. Terra Labs CEO Do Kwon tweeted that they were "currently working on documenting the use of the LFG BTC reserves during the depegging event.
"I've spent the last few days on the phone calling Terra community members - builders, community members, employees, friends and family, who have been devastated by UST depegging," Kwon said in a tweet thread.
The UST coin is designed to retain a value of one US dollar at all times but was depegged last week, and fell to just 17 cents. Luna's value collapsed in one of the most stunning crypto crashes ever recorded. In total, over $15 billion in cryptocurrency value was wiped after the TerraUSD stablecoin collapsed.
In the case of Luna Foundation Guard, Elliptic followed the money to major exchanges Gemini and Binance. According to the Blockchain analytics firm, 52,189 BTC was moved to a single account at US crypto exchange Gemini, via several Bitcoin transactions. The remaining 28,205 Bitcoin in Terra's reserves were "moved in their entirety, in a single transaction, to an account at the cryptocurrency exchange Binance".
"It is not possible to identify whether these assets were sold or subsequently moved to other wallets," Tom Robinson, co-founder and chief scientist at Elliptic, was quoted as saying. "All we can see is it going into these exchanges," Robinson told CoinDesk.
" Neither I nor any institutions that I am affiliated with profited in any way from this incident. I sold no Luna nor UST during the crisis," according to Kwon, Terra Labs CEO.
The whereabouts of $3.5 billion still remain a mystery.
(The above story first appeared on LatestLY on May 16, 2022 04:00 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).