At the end of last week, on-chain analyst firm Elliptic released its findings on the stock of Bitcoin purchased by the LFG to help secure the UST stablecoin.
The Foundation bought around 80.000 BTC between January and May of this year to bolster UST's reserves. Since the Earth ecosystem collapsed last week, many are wondering what exactly happened to that $ 3,5 billion worth of Bitcoin.
The non-profit organization born to support the growth of the Earth ecosystem had announced that it would buy up to 10 billion dollars in Bitcoin and other cryptocurrencies to support UST. However, now everything has changed.
Track your Bitcoin stash
Elliptic reported that more than 80.000 BTC has been moved to just two major exchanges, Binance and Gemini.
On May 9, the LFG announced it would lend $ 750 million worth of Bitcoin to over-the-counter (OTC) trading firms to help protect the UST peg. In the same period, 22.189 BTC was sent from an LFG-linked Bitcoin address to a new address, and a few hours later, another 30.000 BTC was sent from other LFG wallets to this same address.
Elliptic monitored these two wallets and reported that the entire sum of 52.198 BTC was sent to a wallet at the US regulated cryptocurrency exchange Gemini within hours of these two transactions. The remaining 28.205 BTC was sent to a wallet address at Binance on May 10, he added before stating:
"It is not possible to trace the assets further or identify whether they have been sold to support the UST price."
The firm concluded that those looking to recoup UST losses may be interested in determining whether BTC is still held on exchanges.
Over the weekend, the Earth team promised an autopsy and further updates, but as of this writing, there is nothing new on their feed.
Binance boss intervenes
On May 14, Binance chief Changpeng Zhao expressed his view on the collapse of the system, questioning the feasibility of a hard fork. He stated that "the bifurcation does not give any value to the new bifurcation", adding that "you cannot cancel all transactions after an old snapshot, both on-chain and off-chain (exchanges)", before asking:
"Where did all the BTC that were to be used as reserves go?".
Perhaps he should have read Elliptic's report, as nearly half went to his exchange.
On May 15 he continued with his narrative, stating that “failures can / should happen. But when they happen, transparency, speed of communication and responsibility towards the community are extremely important ”.
CZ confirmed that the company had no active investments in Terra and did not own any UST. However, this is not of much comfort to the thousands Investors who held UST or LUNA on Binance, as they were delisted by the company last week before it resumed trading on May 13.
At the time of writing, UST was still a long way off its benchmark, trading around $ 0,148, while LUNA was low at $ 0,00025.