We clarified the latest data: today UST is valued at 9 cents instead of $1. The local low for the day was 5 cents, though the historical high of the previous Friday was 3 cents.

UST rate chart from Terra

The situation with LUNA also does not look good. Of course, the coin shows bounces from the local bottom and brings profit to the most brave traders, but this does not change the situation: most investors lost a lot of money on the project. Some of them even lost all their capital.

LUNA exchange rate chart on Binance

With this in mind, investors predictably wondered about the giant’s actions and transactions.

Why did UST depreciate?

The organisation’s actions were logical during such a force majeure event. It also had all the necessary resources: before that, Terra creator Do Kwon had repeatedly announced that his team was actively accumulating BTC in its reserve to back up UST. LFG had at least $3.5 billion in bitcoins, LUNA, UST and some other popular altcoins in its wallets.

Counting the loss of LFG’s reserves

The strategy was to release some reserves in order to buy UST with that money. The presence of a large buyer in the market should have boosted demand for the stablecoin and stabilised its price around $1. According to Decrypt’s sources, the LFG team failed in their intentions and after a couple of days the reserves were virtually empty.

This information has now been confirmed from the official Luna Foundation Guard Twitter account. While on May 7 the amount of Bitcoin in reserves was 80,394 BTC, by yesterday only 313 BTC remained in LFG reserves.

A detailed chart of the movement of reserve funds

And now the main question that even the founders of major crypto exchanges are asking: where did all the Terra team’s billions go? According to analytics platform Elliptic, on Monday – a few hours after LFG announced the release of $1.5 billion in reserves – the LFG-affiliated crypto sent about $750 million worth of bitcoins to a new wallet. On the evening of the same day, another $930 million in BTC was sent from several LFG-linked wallets to the same new address. Then 52,189 BTC worth more than $1.6 billion were transferred from the new address to a single Gemini cryptocurrency account.

The transfer left another 28,205 BTC worth about $875 million in LFG’s reserve. In the early hours of Tuesday morning, the entire amount was transferred to an account on the Binance exchange. Were these coins sold on the exchanges? It is not yet possible to confirm this fact with certainty. Because of this, many investors have even started to question the transparency of LFG and the actions of its founder Do Kwon.

Although it is unlikely that he is involved in a scheme with trivial embezzlement of funds, according to representatives of the cryptocurrency community: too large transactions to exchanges, which can easily “leak” all the necessary information to law enforcement agencies.

Cryptocurrency market collapse

The existence of three tranches is also confirmed by representatives of Glassnode. According to their data, the fund's Bitcoin reserves of 80,394 coins were spent over two days, on May 9 and 10. It was then that the company was actively taking action to save the UST exchange rate.

Bitcoin trusts from Terra


As Luna fund representatives clarified, they directly sold 26,281,671 USDT and 23,555,590 USDC to buy 50,200,071 UST, and transferred 52,189 BTC for intermediary transactions equivalent to 1,515,689,462 UST, with 5,313 BTC of this amount being refunded. On 10 May, LFG fund representatives sold 33,206 BTC for 1,164,018,521 UST. Two days later, they exchanged 883,525,674 UST for 221,021,746 LUNA, which went to network validators to protect against a possible attack.

The Luna Foundation Guard now has 313 BTC, 39,914 BNB, 1,973,554 AVAX, 1,847,079,725 UST and 222,713,007 LUNA, of which 221,021,746 coins are in stacking with validators

The scandal surrounding Terra is so high-profile that it has even caught the attention of Etherium creator Vitalik Buterin. Here’s what he wrote on his Twitter account.

“Algostables have become a propaganda term that justifies unsupported stabelcoins and puts them on par with backed coins like RAI or DAI.

Changpen Zhao, the head of Binance, also expressed his thoughts. He does not believe that the Terra team will be able to significantly minimize the damage to investors and return the project to its old ways. In this way, the LFG management allegedly wants to wishful thinking, but this is unlikely to lead to anything good, the entrepreneur believes.


We believe that the events of May 2022 will forever remain in the history of cryptocurrencies. Still, the market crash - which was exacerbated by the Luna Foundation Guard's bitcoin drain - was serious. In addition, the collapse of a project with such a large market capitalisation is also a major event. We hope that other developers will draw conclusions from the situation, so that this will happen as rarely as possible.

What do you think about it? Share your opinion in our millionaires’ cryptochat. There we discuss other important news from the world of decentralisation.