The UST peg that supports the Luna Foundation token, LUNAUSDTUSD on Binance has been broken. On October 27th at 2:00PM PST, a wallet holding one of the largest balances in USDT was emptied and sent to an unknown address. Coincidentally enough, this is when Bitcoin Cash futures trading started on CME which caused the price to drop significantly from $6200 down to around $5500 before evening out towards normal levels.
The “ust peg chart” is a chart that shows the price of UST. As you can see, the price has been steadily rising since the beginning of 2018. However, it recently dropped significantly after news broke that 42.5K BTC was moved from Luna Foundation Guard wallet as UST peg crumbles.
On Monday, about $1.4 billion in Bitcoin (BTC) was apparently transferred from a wallet linked to Luna Foundation Guard (LFG), raising suspicions about its final destination on a day when Bitcoin’s price fell more than 11%.
The LFG wallet spent 42,530.82827771 BTC on Monday, according to data from blockchain explorer Blockchair, albeit the destination remained unclear. The cash were apparently divided into two batches — around 12,500 BTC and 30,000 BTC, respectively — with a part being transmitted to cryptocurrency exchange OKEX.
It seems that the monies have been divided, with 12.5k and 30k BTC travelling in opposite directions.
A portion was allegedly given to OKEX as well image. twitter.com/hlZtmMDcT5
May 9, 2022 — Daxx (@DaxxTrader)
Around the same moment, the Whale Alert Twitter feed announced that 12,531 BTC had been moved from one wallet to another. Whale Alert offers massive Bitcoin transaction tracking and analytics reports.
Unknown wallet to unknown wallet transferred 12,531 #BTC (384,431,740 USD) https://t.co/4ZuCN34Fnr
May 9, 2022 — Whale Alert (@whale alert)
The action occurred less than a day after LFG said it will “proactively safeguard the integrity of the UST peg [and] larger Terra economy,” referring to its popular algorithmic stablecoin TerraUSD, which had fallen below its US dollar peg. Loaning $750 million in Bitcoin to over-the-counter trading businesses to assist safeguard the UST peg, as well as loaning $750 million in UST to acquire additional Bitcoin once market circumstances stabilized, were among the measures taken.
1/ Market volatility across crypto assets has been high over the last several days.
The last week’s unstable macro circumstances across legacy asset classes mirror the market instability.
May 9, 2022 — LFG | Luna Foundation Guard (@LFG org)
According to CoinMarketCap, UST hit a low of UST reached a low of $0.9428 on Monday, according to CoinMarketCap..9428 on Monday.
UST has already lost its peg, particularly during the March 2020 Covid-19 liquidity event. CoinMarketCap is the source of this information.
LUNA loses 20% in a day as a whale sells Terra’s UST stablecoin – is a selloff imminent?
Terra (LUNA) lost a substantial amount of value over the weekend, while project co-founder Do Kwon cautioned that the selloff was the result of a concerted assault against the protocol. On Sunday, he stressed that LFG is “not aiming to exit its bitcoin position,” but rather is placing cash in the hands of a professional market maker who would purchase UST if the price falls below the peg and BTC if the price rises to or equals the peg.
2/ First and foremost, *LFG is not attempting to sell its bitcoin position*.
The objective is to place this money in the hands of a professional market maker so that:
1) Buy UST if price < peg 2) Buy BTC if price >= peg
As a result, the liquidity around the UST peg has greatly improved.
May 9, 2022 — Do Kwon (@stablekwon)
Kwon also tweeted on Monday that he will be “deploying additional funds,” but did not indicate how much.
LFG conducted a $1.5 billion Bitcoin buy last week through over-the-counter swaps with Genesis Trading and direct purchases from crypto venture fund Three Arrows Capital, resulting in extreme market volatility. The charity organization was claimed to have over $3.5 billion worth of BTC at the time, with an average price of $37,100 per coin. According to statistics from Cointelegraph Markets Pro and TradingView, the price of bitcoin fell to roughly $30,300 on Monday.
This article is currently being updated.
The “luna foundation guard twitter” is a tweet that was posted by the Luna Foundation Guard, which has been confirmed to have moved 42.5K BTC from their wallet as the UST peg crumbled.
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