The reserve fund of the collapsed cryptocurrencies Terra and Luna
Software

The reserve fund of the collapsed cryptocurrencies Terra and Luna disappeared without a trace

Experts from Elliptic, a private company specializing in cryptocurrency research, reported that $3.5 billion worth of bitcoins acquired from the creators of the collapsed cryptocurrencies Terra and Luna were listed on two crypto exchanges were withdrawn, after which they disappeared without a trace. and it is not possible to trace their further fate.

    Image Source: Tumisu / pixabay.com

Image Source: Tumisu / pixabay.com

The fate of the reserve fund Terra could become a key issue as crypto investors seek to recoup losses incurred as a result of the blockchain collapse. Elliptic noted that the Luna Foundation Guard (LFG) purchased $3.5 billion worth of bitcoin between January and March, which will be used to purchase Terra to stabilize the cryptocurrency and maintain its peg to the dollar. But literally the next day, the crypto wallets storing those funds were devastated.

About $1.7 billion worth of bitcoin was transferred from LFG wallets to a new address in two transactions on May 9, the same day that Terra co-founder Do Kwon announced the funds to correct the rate would be used. A few hours later, the entire amount was transferred to an account on the Gemini crypto exchange in several transactions, and from that moment it was impossible to trace the further fate of the assets, Elliptic reported.

The authors of the investigation also said that the bitcoins remaining in the reserve fund went to crypto exchange Binance in one transaction the next day, May 10. Their further fate is also unknown: the funds could be exchanged for money or distributed to other wallets.

Keep in mind that stablecoin Terra was not backed by money or securities from the start – its price had to be supported by an algorithm that, when the price fell, issued “coins” of the related cryptocurrency Luna. However, on May 9, Terra’s prices began to fall sharply, and the algorithm did not help: Luna went into hyperinflation, falling from $85 to $0.005 in a few days. The “Plan B” for the project was a reserve fund in bitcoins, but its fate is now unknown.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

Add Comment

Click here to post a comment