LUNA and UST Creator Do Kwon Runs Away With $67 Million?

In the spring of 2022, the UST stablecoin was one of the three largest with a capitalization of $19 billion. Its sudden decoupling fromUS dollar led to a crisis of a number ofcrypto projects including Three Arrows Capital and Celsius Network. Do Kwon assured the community that there was simply not enough money in the fund to provide liquidity to UST. However, new details of the case make one doubt his honesty.

CapitalizationUST, $billion Image source: coinmarketcap.com

UST was the algorithmic stablecoin of the projectTerra, its course was supported by the LUNA internal coin and a $3 billion cryptocurrency fund (mainly in BTC). Ethereum.

It has not yet been determined exactly whatcause of the collapse: poor balance of the system, an external attack on the stability of the UST, or abuse of investor confidence. When UST lost its USD peg, LFG was depleted within hours and LUNA depreciated.

Image Source: Cryptocurrency ExchangeStormGain

Analyst firm Elliptic attempted to tracethe fate of the fund's assets back in May. So it turned out that 28 thousand BTC was sent to the address in Binance, and 52 thousand BTC to Gemini. After that, the thread was lost. Do Kwon assured that these funds were intended for market makers to sell Bitcoin and buy UST.

Image source: elliptic.co

Because Do Kwon didn't show up at the police stationupon request, and his location could not be established, the South Korean authorities on September 14 submitted an application to Interpol for his search and extradition. And between September 15 and 17, 3,313 BTC (~$67 million) from the LFG wallet on Binance were transferred to KuCoin and OKX, according to the CoinDesk portal, citing the CryptoQuant analytical agency. Law enforcement agencies in South Korea have asked the exchanges to freeze the funds received.

At the same time, Do Kwon himself through tweetsclaims that he is not running from anyone, and calls the transfer of funds from the LFG for his own needs disinformation. LFG from the official account also claims that there was only one wallet in BTC, forgetting about the history of transfers to market makers.

Image source: bitinfocharts.com

Unfortunately, more and more arguments allude tothe unscrupulous game of Do Kwon, when the community, investors and partners turned out to be exchange pieces in it. Since, in fact, Do Kwon continues to hide from the police, the Ministry of Foreign Affairs plans to cancel his passport.

 

Analytical group StormGain

(platform for trading, exchanging and storing cryptocurrency)