Experts from Elliptic, an independent company that specializes in crypto-currency investigations reported that $3.5 Billion worth of bitcoins was withdrawn to two crypto exchanges by the creators and owners of the collapsed cryptocurrencies Terra & Luna. They then vanished without trace and it is impossible to determine their fate.
If crypto investors want to recover losses from the collapse of blockchain, the fate of Terra’s reserve fund could be a major issue. Elliptic has found that the Luna Foundation Guard purchased $3.5 Billion worth of bitcoin between January & March. Terra to stabilise the cryptocurrency and keep it pegged to the dollar. The funds in the crypto wallets were then destroyed literally the next morning.
On May 9, Terra co-founder Do Kwon announced the transfer of approximately $1.7 billion in bitcoin from LFG wallets to a new address. It was done in two transactions. Elliptic reported that the entire amount of bitcoin in multiple transactions was transferred to one Gemini account within hours. From then on, it was impossible to track the future fate of the assets.
According to the investigators, the bitcoins that were left in the reserve fund on May 10 went to Binance’s account in one transaction. It is not known what their fate will be. The funds could be traded for money, or distributed to other wallets.
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. The Terra rates began to drop sharply on May 9th, and the algorithm failed to help. Luna’s price plunged from $85 to $0.005 just a few days later. The project’s “Plan B” was a reserve in bitcoins. However, it is not known what its fate will be.