Experts at Elliptic, a private firm that specializes in crypto currency investigations, reported that $3.5Billion of bitcoins had been acquired by the creators the collapsed cryptocurrency Terra and Luna. The bitcoins were then withdrawn to the two crypto-exchanges. It is now impossible to trace their fate.
The fate of Terra Reserve Fund could become a crucial issue for crypto investors looking to recover their losses due to the collapse in the blockchain. Elliptic has found that between January & March, $3.5 billion worth bitcoin was purchased by the Luna Foundation Guard. Terra to stabilise the cryptocurrency and keep it pegged to the dollar. The crypto wallets where these funds were kept were destroyed the very next day.
A total of $1.7 billion worth bitcoin was transferred from LFG wallets via two transactions to a different address on May 9. This happened the same day Terra founder Do Kwon declared that the funds would be used for correcting the course. Elliptic reported that after a few hours, the entire amount from several transactions was sent to one Gemini crypto exchange account. It became impossible to track their future fates.
Also, the investigators claimed that bitcoins left in reserve on May 10th went to Binance’s account through one transaction. The fate of the funds is unknown. They could be converted for money or distributed to another wallet.
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. On May 9, Terra’s quotes started to fall sharply and the algorithm was not able to stop it: Luna fell from $85 down to $0.005 within a matter of days. The project’s “Plan B” was a reserve in bitcoins. However, it is not known what its fate will be.