Terra’s Bitcoin Whereabouts Holds Mystery After Transfers
The $3.5 billion worth of Bitcoin purchased as a reserve by the foundation created by the creators of the failing Terra blockchain became untraceable after being moved to two cryptocurrency platforms, according to the blockchain forensics firm Elliptical.
What happened to the cryptocurrency held in reserve may become a key question if investors seek to recoup losses incurred as a result of the blockchain meltdown.
Between January and March, the Luna Foundation Guard, or LFG, purchased $3.5 billion worth of Bitcoin, Elliptic said, according to its blockchain analytics tracking tools.
When the value of Terraform Lab’s TerraUSD, or UST, stablecoin began to fall on May 9, the foundation said it would use bitcoin from the reserve to buy UST to maintain its parity with the dollar. The next day, the crypto wallets used to hold the reserves were emptied, Elliptic said.
About $1.7 billion was sent on May 9 from LFG wallets to a new address through two transactions after Terra co-founder Do Kwon said the funds would be used to back the peg. Within hours, the entire amount was transferred to a single account on the Gemini crypto exchange through several transactions and it was not possible to trace the assets from that point, Elliptic wrote.
The remaining bitcoin reserves were transferred on May 10 in a single transaction to an account on the Binance exchange, Elliptic said. The blockchain analytics company is unable to identify whether the assets have been sold or moved to other wallets at this stage.