What happened to the 80,000 bitcoins that the Luna Foundation had?

What happened to the 80,000 bitcoins that the Luna Foundation had?

As a consequence of the almost total devaluation of its cryptocurrencies terra USD (UST) and terra (LUNA), the Luna Foundation decided to get rid of its reserves in bitcoin (BTC) and other cryptoassets 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 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 Crypto News price index, the aforementioned BTC is equivalent to USD 2.408 million, at the time of writing this article. The total balance sheet, according to the reports of the LFG, amounted to USD 3,193 million.

Tweet from LFG Luna Foundation Guard.
The details of Fundación Luna’s reservations as of May 7, 2022. Source: Twitter @LFG_org.

While, as of today (May 16, 2022) the Luna Foundation claims to own 313 BTC, 39,914 BNB, 1,973,554 AVAX, 1,847,079,725 UST and 222 million LUNA. Of this last cryptocurrency, native to the Terra network, more than 221 million are staked by validators. It should also be considered that its market value has completely depreciated. The total balance sheet is approximately USD 89.5 million.

Reservations in time.
In a few days, the reserves of the Luna Foundation fell precipitously. Source: Luna Foundation Guard. Source: dashboard.com .

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 to “convert this reserve into UST,” they detail in the publication. This was done “by swaps directly on-chain and transferring BTC to a counterparty to allow it to trade with the Foundation in large quantities and in the short term.”

Specifically, what LFG did with its reserves was “to directly sell 26,281,671 USDT and 23,555,590 USDC, for a total of 50,200,071 UST”. In addition, he transferred 52,189 BTC to trade with a counterparty.

Subsequently, on May 10, with the UST price already at USD 0.75, Luna Foundation borrowed 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 maintain the parity of UST with the US dollar. These movements consisted of 33,206 BTC sold in exchange for more than US$1.164 billion.

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 Criptonews reported.

Tracking the bitcoins of Fundación Luna

Beyond the official narrative, Elliptic, a blockchain analysis company, he has tracked the bitcoin addresses of the Luna Foundation to find out where the multimillion-dollar reserves went after the ecosystem debacle, which left many people with very serious economic losses.

Terra LF, Binance, Gemini. Elliptic.
This is how the bitcoins of Fundación Luna moved after the fall of UST. Source: Elliptic. Source: elliptic.com .

First of all, 52,189 BTC were moved from several LFG wallets to one account on the Gemini exchange in various transactions. From there, clarifies the firm conducting the investigation, it cannot be traced if these were sold to maintain the sale price.

On the other hand, 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, their subsequent movements cannot be identified.

According to what LFG published in recent hours, bitcoins certainly would have been sold to try to regain the parity of UST, something that ultimately did not happen. While its users are still lamenting million-dollar losses, LFG will have to decide how to use the reserves it has left to reward them in one way or another.