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HomeCrypto NewsMarketCoinDesk Korea Discloses Revelations That Terraform Labs Wallets Caused UST Depegging

CoinDesk Korea Discloses Revelations That Terraform Labs Wallets Caused UST Depegging

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New Investigations Shows Terra Owns the Wallet That Crashed LUNA and UST.


More than one month after Terra ecosystem tokens, UST, and LUNA collapse, new revelations continue to surface, revealing the actual cause of the unfortunate incident.

Contrary to reports that Terra tokens plunged as a result of the external attack, Terra’s collapse came from internal actions, Coindesk Korea reported earlier today.

According to the report, the crypto wallet that conducted a series of transactions that resulted in the massive collapse of Terra tokens is owned by TerraForm Labs (TFL).

Uppsala Investigation Indicts TFL

After TerraUSD (UST) lost its peg to the dollar and the subsequent crash of LUNA and other digital currencies, Uppsala Security, as well as Coindesk, launched an investigation to uncover the main cause of Terra’s collapse.

For clarity, Coindesk Korea reports that the wallet was created on May 7, 2022, the same day that UST lost its peg to the dollar.

Per the report, a few minutes after Do Kwon, the CEO of Terra, withdrew 150 million UST from the project’s decentralized finance (DeFi) curve on May 7, the wallet exchanged 85 million UST for USD Coin (USDC) from the Terra curve.

The wallet operators proceeded to deposit the swapped USDC to San Francisco-based exchange Coinbase, and also deposited large amounts of UST to other trading platforms globally, a move that accelerated the de-pegging of the Terra algorithmic stable coin.

Deep Investigations Show Shocking Results

In a bid to discover how the wallet that launched the attack on Terra tokens got its funds, Uppsala Security and Coindesk Korea discovered that the wallet was funded by another wallet, dubbed Wallet A (T), created on the Ethereum blockchain and believed to be controlled by the TFL team.

Notably, the TFL team exchanged UST based on the Terra chain for an Ethereum-based version using a wormhole.

Coindesk reported that an intensive investigation into the transaction activities of the second wallet revealed that the wallet had transferred a huge amount of $UST to Binance, especially to addresses belonging to TFL, including that of the Luna Foundation Guard (LFG).

“Combining the above findings discovered through on-chain forensics, the Binance user memo ‘104721486’ wallet, LFG wallet, LUNC DAO wallet, wallet A(T), and wallet A that received UST from wallet A(T) are all It leads to the conclusion that the wallets are either owned by the same owner or managed by a single group,” Coindesk added.

Not New

This is not the first time Kwon and his company have been accused of conducting illicit businesses prior to the crash of Terra. As reported, Kwon cashed out over $2 billion a month before Terra’s collapse.

Yesterday, popular Terra influencer FatMan noted that Kwon owns a secret wallet he used to manipulate voting exercises on new proposals to ensure things go his way.

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Lele Jima
Lele Jima
Lele Jima is a cryptocurrency enthusiast and journalist who is focused on educating people about how the nascent asset class is transforming the world. Aside from cryptocurrency-related activities, Jima is a lover of sports and music.

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