The Luna Foundation Guard's 80k Bitcoin Sold to Save UST's Peg Were Likely Scooped Up By BTC Whales

The Luna Foundation Guard Now Left with 313 Bitcoin

As to the flow of the LFG’s Bitcoin during its attempt to save UST’s peg, a report by the team at Elliptic.com concluded that the transfers of Bitcoin started on the morning of May 9th when 22,189 BTC was sent to a new address. Later on, the LFG sent another 30k Bitcoin to the same address, and within hours, a total of 52,189 BTC had been sent to the Gemini exchange. The following day, 28,295 BTC was sent to Binance.

In a May 16th Tweet, the LFG broke down how its BTC reserves were sold to save UST’s peg. Their explanation kicked off with the declaration that it held 80,394 Bitcoin as of May 7th, 2022.

1/ As of Saturday, May 7, 2022, the Luna Foundation Guard held a reserve consisting of the following assets:
· 80,394 $BTC
· 39,914 $BNB
· 26,281,671 $USDT
· 23,555,590 $USDC
· 1,973,554 $AVAX
· 697,344 $UST
· 1,691,261 $LUNA

— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022

As UST lost its peg, the LFG started selling its Bitcoin to convert it into UST. It explained:

Avalanche Team: The Luna Foundation Guard and Terraform Labs are Yet to Sell AVAX Reserves Bought at $200m in April

…when the price of $UST began to drop substantially below one dollar, the Foundation began converting this reserve to $UST.

The Foundation did so by directly executing on-chain swaps and transferring $BTC to a counterparty to enable them to enter trades with the Foundation in large size & on short notice.

During the process, the LFG transferred the earlier mentioned ‘52,189 Bitcoin to trade with a counterparty, net of an excess of 5,313 BTC that was returned, for an aggregate 1,515,689,462 UST.’ Another 33,206 Bitcoin was sold for an aggregate of 1,164,018,521 UST.

The team at the Luna Foundation Guard concluded their report on the fate of its Bitcoin reserves by providing the following update of its holdings as of May 16th.

  • 313 Bitcoin
  • 39,914 Binance Coin
  • 1,973,554 Avalanche (AVAX)
  • 1,847,079,725 UST
  • 222,713,007 LUNA (of which 221,021,746 is currently staked with validators)

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