Key Insights:
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More than 80,000 BTC was sent to Binance and Gemini after the Terra collapse.
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It remains to be seen whether the Bitcoins remain on the exchanges.
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Binance boss ‘CZ’ said hard forking gives the chain no value.
Late last week, on-chain analysis firm Elliptic published their findings on the LFG’s stash of Bitcoin purchased to help collateralize the UST stablecoin.
The Foundation purchased around 80,000 BTC between January and May this year to shore up UST reserves. Since the Terra ecosystem collapsed last week, many have been asking what exactly happened to that $3.5 billion worth of Bitcoin.
The non-profit organization formed to support the growth of the Terra ecosystem announced that it would purchase as much as $10 billion in Bitcoin and other crypto assets to back UST. However, everything has changed now.
Tracking The Bitcoin Stash
Elliptic reported that more than 80,000 BTC was moved to just two major exchanges, Binance and Gemini.
On May 9, the LFG announced that it would loan $750 million worth of Bitcoin to over-the-counter (OTC) trading firms to help protect the UST peg. Around the same time, 22,189 BTC was sent from a Bitcoin address linked to LFG to a new address, and a few hours later, a further 30,000 BTC was sent from other LFG wallets to this same address.
Elliptic tracked these two wallets and reported that the entire 52,198 BTC was sent to a wallet at regulated U.S. crypto exchange Gemini within hours of these two transactions. The remaining 28,205 BTC was sent to a wallet address at Binance on May 10, it added before stating:
“It is not possible to trace the assets further or identify whether they were sold to support the UST price.”
The firm concluded that those seeking to recoup UST losses might be interested in determining whether the BTC remains held on the exchanges.
Over the weekend, the Terra team promised a post-mortem and more updates, but nothing new was on their feed at the time of writing.
Binance Boss Weighs In
On May 14, Binance boss Changpeng Zhao aired his view on the system collapse, questioning the viability of a hard fork. He said “forking does not give the new fork any value,” adding that “one cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges),” before asking: