After the collapse of Terra’s once-stable coin terrausd (UST), a number of people wondered where the Luna Foundation Guard’s (LFG) bitcoin went, as the funds were supposed to be used to defend UST’s $1 parity. On Friday, the blockchain intelligence and analytics firm, Elliptic, published a blog post that summarizes where the bitcoin was sent, according to the firm’s network surveillance tools.
LFG Bitcoin Stash Deposited in 2 Digital Currency Exchanges According to Elliptic’s Blockchain Analytics Software
While reflecting on the recent crypto market chaos and Terra stablecoin implosion, a large number of people on forums and social media asked the question: “Where is LFG’s Bitcoin reserve?” For example, this weekend on Twitter, a person wrote:
Luna Foundation Guard (LFG) had a bitcoin reserve that was worth over $3B before the UST and Luna crisis began. But the LFG reserve wallet is now empty but it was reported that Bitcoins weren’t used to calm the crisis. Then where did the Bitcoins go to? People need answers.
Additionally, on May 13, the founder of Terra Do Kwon told the public that the team plans to update the crypto community about bitcoin (BTC) reserves.
“We are currently working on documenting the use of the LFG BTC reserves during the de-pegging event,” Kwon said. “Please be patient with us as our teams are juggling multiple tasks at the same time.” Following Kwon’s Twitter thread, the blockchain analytics company Elliptic published a blog post that explains the LFG’s BTC moves in more detail.
When non-profit organization LFG decided to move bitcoin on May 9, blockchain analysis software from Elliptic monitored the situation. After LFG revealed that it would lend $750 million in BTC to market makers, Elliptic’s blog details that Kwon clarified that LFG would use BTC”trading.” Next, Elliptic’s software detected two transactions worth 52,189 BTC sent to a new address linked to the LFG reserve.
80,394 Bitcoin Moved From LFG’s Stash
In addition to the 52,189 BTC, LFG held another wallet with 28,205 BTC, and LFG’s entire bitcoin reserve added up to approximately 80,394 bitcoin (BTC) total. According to Elliptic, all the funds were sent to Binance and Gemini amid the market chaos.
“All of that 52,189 BTC was then transferred to a single account at Gemini, the U.S.-based cryptocurrency exchange — over multiple bitcoin transactions,” Elliptic said on Friday. “It is not possible to further retrace the assets or identify if they were sold to support the UST price.” The blog post adds:
This left 28,205 BTC in Terra’s reserves. At 1 a.m. UTC on May 10th, this was moved in its entirety, in a single transaction, to an account at the cryptocurrency exchange Binance. Again it is not possible to identify whether these assets were sold or subsequently moved to other wallets.
Bitcoin.com News also reviewed the on-chain moves and confirmed that Elliptic’s summary was accurate. For example, the LFG bitcoin wallet has interacted with this bitcoin address, and the wallet is flagged as a Binance hot wallet. Oxt.me data has an annotation written by Ergobtc that indicates it is the “central hot wallet” of the trading platform. The wallet was created on October 8, 2021 and 9.5 million BTC passed through the wallet.
LFG’s bitcoin wallet also interacted with this address which also has an oxt.me annotation that says it’s a Gemini exchange address. The address created on June 13, 2017, has seen a total of 1,284,918 BTC pass through the bitcoin wallet. While the Binance hot wallet still contains BTC for hot wallet services, the Gemini exchange address has a zero balance on May 14, 2022.
