As a consequence of the almost total devaluation of its terra USD (UST) and terra (LUNA) cryptocurrencies, the Luna Foundation decided to get rid of its reserves in bitcoin (BTC) and other cryptoactives to alleviate the situation. The entity that brings together developers of the Terra network sold crypto assets for more than USD 3,103 million.
According to the official account of the Luna Foundation Guard (LFG), published in a thread on his official Twitter account, As of Saturday, May 7, 2022, LFG had reserves that included 80,394 BTC, 39,914 BNB (BNB), 26,281,671 tether (USDT) and 23,555 USD coin (USDC), among other crypto assets. According to the CriptoNoticias price index, the mentioned BTCs are equivalent to USD 2,408 million, at the time of writing this article. The total balance, according to LFG reportsamounted to USD 3,193 million.
While, As of today (May 16, 2022) the Luna Foundation claims to have 313 BTC, 39,914 BNB, 1,973,554 AVAX, 1,847,079,725 UST and 222 million LUNA. Of this latest cryptocurrency, native to the Terra network, more than 221 million are staked by validators. It should also be considered that its market value has been completely depreciated. The total balance is approximately USD 89.5 million.
This is how the Luna Foundation sold its bitcoins
When the UST stablecoin began to lose parity with its underlying asset, the US dollar, LFG began “converting this reserve into UST”, the publication details. This was done “by directly on-chain swaps and transferring BTC to a counterparty to allow it to trade with the Foundation in large amounts and on a short-term basis.”
Specifically, what LFG did with its reserves was “directly sell 26,281,671 USDT and 23,555,590 USDC, for a total of 50,200,071 UST”. Additionally, he transferred 52,189 BTC to trade with a counterparty.
Subsequently, on May 10, with the price of UST already at USD 0.75, Moon Foundation lent funds from its reserves to private companies in order for them to manage them to trade with them, generate returns and thus inject more reserves to sustain the parity of UST with the US dollar. These movements consisted of 33,206 BTC sold in exchange for more than 1,164 million UST.
On May 12, the deployment of funds to try to save UST and LUNA continued. On that day, LFG exchanged 883 million UST in exchange for 221 million LUNA, while the network was paralyzed to “prevent a governance attack,” as CriptoNoticias reported.
The tracking of Fundación Luna’s bitcoins
Beyond the official narrative, Elliptic, a blockchain analytics company, has tracked the Luna Foundation’s bitcoin addresses to find out where the multimillion-dollar reserves went after the ecosystem debacle, which left many people with very serious economic losses.
First, 52,189 BTC moved from various LFG wallets to a Gemini exchange account in multiple transactions. From there, the firm that carries out the investigation clarifies, it cannot be traced if these were sold to maintain the price of UST.
Besides, the remaining 28,205 BTC was moved in a single transaction to an account on the Binance exchange at 1 a.m. (UTC) on May 10. Again, his subsequent movements cannot be identified.
According to what LFG published in recent hours, bitcoins certainly would have been sold to try to recover the parity of UST, something that finally did not happen. While its users are still lamenting millionaire losses, LFG will have to decide how to use the remaining reserves to reward them in one way or another.