Last week, Terra (LUNA) as well as the algorithmic stablecoin terraUSD (UST) collapsed. The so-called “peg” or peg between UST and USD failed and caused a death spiral of both cryptocurrencies.

The Luna Foundation Guard (LFG) bought a massive amount of BTC earlier this year to serve as additional collateral should the link be lost. The company sold over 80,000 BTC in three days to salvage this pairing, but we now know it was in vain.

However, this weekend Crypto Insiders reported that it was unclear what had happened to a large part of this BTC. LFG confirms this morning that the rest of this BTC has also been sold. The company initially sold about USD 26 million, USD 24 million and USD 50 thousand BTC for UST.

Missing bitcoins have also been sold

However, the question was what happened to the remaining 30,000 BTC. LFG confirms this morning that these BTC have also been sold for UST. That means there is only about 313 BTC left in LFG’s reserves. So the total value of these reserves has dropped from $3.21 billion to just $238 million, researcher Mika Honkasalo calculated.

At least that allays fears that another billion dollars in bitcoins are about to be dumped. Honkasalo even calls it impressive that this sale was so strongly absorbed by the market.

This morning Ki Young Ju, CEO of analytics firm CryptoQuant, agreed. He said this dump may have been cushioned by significant accumulation of BTC by institutional investors.

Furthermore, LFG reports that it plans to use the remaining assets to compensate holders of UST. The company reports that the smaller holders will be the first to act. That may follow advice from Ethereum (ETH) founder Vitalik Buterin, who indicated that small investors should be compensated first. More on this later on Crypto Insiders.


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