Crypto News Luna Crash
The weekend before, Terra’s UST stablecoin first showed indicators of instability, falling from its peg in dollars up to $0.985, Luna Foundation Guard (LFG) the foundation responsible for ensuring the overall health of Terra’s ecosystem decided to release $1.5 billion worth of Bitcoin in addition to UST from reserves in order to be repegged UST in USD. U.S. dollar.
The action was the result of a code-red plan LFG had been working on for months: As of the beginning of January LFG has accumulated over $3.5 billion worth of reserve in Bitcoin, Avalanche, LUNA and UST to deploy in the event that UST dropped below $1. As per LFG the money would be loaned to purchase massive quantities of UST which would create buy pressure , which would bring the stablecoin back to the level it was originally set at.
Crypto News Luna Crash Continuous
However, just within hours of the loan’s approval the next day, UST began to fall and continued to fall. As the price of UST sank to previously unheard-of levels, the reserves of LFG were almost empty. Yet, no relief was forthcoming for the stablecoin. at the close of the week UST had plummeted into $0.13, destroying the native currency of Terra, LUNA as well as eradicating $40 billion of value.
The disastrous inability of Terra’s Backstop strategy raises one question: What was the fate of the $3.5 billion? What happened to it?
As per the blockchain analytics platform Elliptic on Monday, hours following LFG’s news of its $1.5 billion loan an Bitcoin address that was associated with LFG delivered a sum of $750 million in Bitcoin to a different address. In the evening, an additional $900 million in Bitcoin was sent from a variety of wallets associated with LFG to the new address. The total amount 52,189 Bitcoin that was worth more than $1.6 billion was transferred out of the address and transferred to Gemini, a single account. Gemini.
The transfer left 28205 Bitcoin, estimated at 875 million dollars at that moment, in the LFG’s reserve. On Tuesday morning the entire sum was transferred to an account with Binance.
If the Bitcoin stored in those Gemini as well as Binance account was traded to purchase huge quantities of UST isn’t known However, it is possible. It’s impossible to determine if those huge amounts of Bitcoin were sold or transferred to other wallets that are still under the control of LFG.
In the aftermath of the tragedy that was triggered through UST as well as LUNA’s demise some have begun to publicly be skeptical about the integrity in Terra in general and Terra co-founder Do Kwan’s actions during the past week.