Terraform Labs (TFL) had nearly US$3.6 billion in unidentified USDT and UST funds before the collapse. There were a large number of abnormal transactions and fund flows in the wallet, and it was suspected of price manipulation or money laundering. If the exchange was willing to cooperate with the prosecutors, or Can be further verified. Before launching the new Terra blockchain and conducting airdrops, Do Kwon, the founder of
public chain Terra, said that he would remove the project party, the community pool and his own wallet address from the airdrop whitelist, making the new Terra a A chain that is entirely owned by the community; but soon after, researcher FatMan revealed that the accusation was a complete lie. In fact, TFL and Do Kwon owned a total of 42.8 million LUNC.
Last week, South Korean media broke the news that a wallet holding 19.69 million LUNA2 tokens is suspected to be held by Do Kwon, and can earn about US$3.1 million in staking income every month, making suspicions that he is lying become more and more serious.
Just yesterday (28th) evening, according to the Korean media "CoindeskKorea", long before the collapse of Terra, Terraform Labs (TFL) and Luna Foundation Guard (LFG) were suspected of having as much as 3.6 billion US dollars in UST and USDT that were not disclosed. Disclosed that it may be used for price manipulation and money laundering of old LUNA (now called LUNC) in DeFi (decentralized finance) and centralized exchanges.
Suspected of using $3.6 billion for insider operations
According to on-chain data analysis conducted by Uppsala Security and CoinDesk Korea, before the Terra crash, an exchange wallet (WalletA in the picture above) marked as held by TFL started from 2021 Between November 17, 2022 and February 5, 2022, approximately US$3.6 billion worth of UST was received from 9 wallets.
found abnormal fund flows during the analysis of the wallet. Around December 29, 2020, someone issued 30,000 UST through the wormhole and deposited it into the wallet at the same time; generally speaking, few specific tokens are deposited into the wallets of exchange users after they are issued, usually only the project team Only then can we achieve it.
Professor Zhao Zaiyu of Seoul University evaluated that this is a test by Bithumb (Korean exchange) and the project team before listing: Before listing the currency on the exchange, deposit and withdrawal tests are usually performed in the exchange wallet.
Since UST was not listed on Bithumb, 30,000 UST was returned to exchange wallet A around January 29, 2021. Therefore, Bithumb’s user wallet and Wallet A connected through the wormhole are both wallets managed by Terraform Labs.
From November 17, 2021 to February 5 this year, a large number of USTs were converted into another stable currency MIM through the stable currency protocol Curve, and then converted into USDT and transferred to include Jump Crypto, Binance, Huobi, Kucoin, OKX and other exchanges.
As for why Terraform Labs has to perform such complicated steps to exchange UST to MIM and then exchange it back to USDT? Industry experts suspect that TFL hopes to sell its UST holdings to the market, but does not want to cause volatility. Coincidentally, on May 6, the day before the collapse of LUNC, $300 million in funds of unknown origin were deposited into Wallet A and transferred to another Binance exchange wallet; the report pointed out that it can be seen that when TerraformLabs transferred When USDT is deposited into wallet A, the price of LUNC fluctuates. It is reasonable to assume that this move manipulates the price of LUNC.
If the exchange cooperates, it may be further confirmed whether there is price manipulation.
According to on-chain analysis data, a large number of UST and USDT of unknown origin are used for abnormal transactions and fund flows through various wallets related to TFL. In addition, there are cases of price manipulation through the use of DeFi The exchange of existing assets for new tokens (such as Wormhole, Curve, and abracatabra) has deepened market doubts that project parties are laundering money and manipulating prices.
Of course, as long as the funds are mixed together through several DeFi, it is not easy to clearly distinguish the transactions. Until the funds finally flow to exchanges such as Binance and disclose wallet information, it is impossible to clearly check how much digital assets are left and where they are transferred; but on the contrary, Uppsala Security said that if the exchange is willing to cooperate with prosecutors’ investigation, whether TFL really has the secret of insider operations may be revealed.
