It's hard to show that they really sold these coins. Certainly, the LFG transferred the coins to some different exchanges. But did they truly sell them?
If I was running a dodgy ponzi scheme and saw it collapsing catastrophically, I don't think I'd be throwing good money after bad trying to futilely patch it up. Much better to stash the remaining assets away somewhere and personally cash out later on.
Also, “In a sense, the market is going to take that as kind of bullish.” - a.k.a. the standard 'this is good for bitcoin' quote, applicable whatever the news is!
A total ponzi scam coin crashed. This IS good for Bitcoin. Bitcoin is not Luna nor is it one of the thousands of other garbage scam coins. The faster those coins are proven scams the better.
Too many people falsely equate "Bitcoin === Crypto".. or "a fan of bitcoin is a fan of all crypto".
So I'd bounce this back to you: How is Luna's Ponzi crash NOT good for bitcoin?
> “In a sense, the market is going to take that as kind of bullish.”
I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets.
There's probably going to be a positive bounce just because markets don't move in straight lines.
There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start melting down again (nothing is ever a sure bet), but it feels like we're closer to hitting a point of selling exhaustion and an inflection point of negative sentiment.
I would hope that there would be some kind of evidence that can corroborate this. A sudden movement of 3B is a lot to hide on a public ledger, exchanges or no. Someone will certainly be connecting the dots.
>Also, “In a sense, the market is going to take that as kind of bullish.” - a.k.a. the standard 'this is good for bitcoin' quote, applicable whatever the news is!
Good observation. I may not be Warren Buffet, but it angers me greatly to see this kind of moronic chatter masquerading as informed opinion on finance or market dynamics.
I think it's a simpler explanation to assume that they would have robbed it by taking their huge stashes of luna and exploiting their 'buying'... it would hold up much better under scrutiny and they could still manage to transfer a significant fraction of the value into their pockets.
There certainly seemed to be a lot of selling pressure on BTC at the time that pushed the price below $30k that has since abated. It is not implausible that this had something to do with LFG's supposed activities.
> Also, “In a sense, the market is going to take that as kind of bullish.” - a.k.a. the standard 'this is good for bitcoin' quote, applicable whatever the news is!
Yes all weekend I had been wondering and cautious based on how much bitcoin was left to sell! Its just a commodity, supply can be faster than demand, specifically when one whale is expected to flood the market
Terra Luna rallied 500x (50,000%) off the lows. Minting many millionaires that bought that dip. The rumors were that the recovery plan involved a bunch of the bitcoin collateral. I couldn’t verify that well.
Knowing its all gone (or the selling pressure is done, whether you believe it was sold or not) is very helpful
“Analysis from the company shows that 52,189 bitcoins were moved to a single account at crypto exchange Gemini”
Oh yeah sure they saw their coin going to s*%t and thought “yeah let’s just throw away a couple billion dollars just so people won’t think we are scammers”. Sure. The Vatican has started a process to canonize these saints.
uh yes exactly? thats the only reason they bought the bitcoin in the first place
Terra Luna was already stupid enough, its stupid to make this part controversial because that was the purpose of this collateral, just as its stupid to not believe the bitcoin was sold after transfer to the exchanges (many people believe that its still owned, or was given to some whales to bail just them out, or the founder keeps it for himself)
I mean that was the expected outcome and now people are like “proof of the expected outcome!?!”
Following months of outcry about the unsustainable nature of Terra Luna, Do Kwon through his foundation tried to partially collateralize the stablecoin with bitcoin, with a goal of buying up to $10bn of bitcoin. He got $3-5bn (at the time, price changed a lot), and this prolonged the confidence system for one additional month.
And then it imploded and sold the collateral, of course it was partial collateral so it failed to do anything in a bank run.
So it doesnt matter whether we get records from exchanges or not. Nothing different would happen. People want to see Do Kwon have more reasons to have charges against him, but there’s no need to attribute it to malice, everything can be explained by incompetence already.
>So it doesnt matter whether we get records from exchanges
It matters a lot. The rumor mill has it LFG directly rescued a few whales in the first sign of crisis. This is a very serious accusation I'd urge no one proclaim without definite proof.
If they concentrated their usage of the reserves to keep the peg earlier, possibly anyone selling below $1 would take an immediate loss and no noticeable depeg would even happen. The way it was handled is extremely useful information to markets and particularly to market makers.
The guy was running a blatant Ponzi scheme (20% risk free yoy return for anyone investing in a 'stable' coin is a Ponzi), and it's the fourth time he's tried this (it's the first time it grew to multiple billions).
He's not stupid, he's just a predator, and just like any other predator, belongs in prison.
> People want to see Do Kwon have more reasons to have charges against him, but there’s no need to attribute it to malice, everything can be explained by incompetence already.
Does there need to be malice rather than incompetence, for charges to be filed?
> Is there any proof at all that they traded it to a counterparty who actually attempted to prop up UST and didn't just run off with them?
This brings up an exceedingly funny point: blockchains excel at making every transaction public (a property that nearly nobody actually wants) and simultaneously offering complete privacy to institutional actors.
* From Crypto Bros putting cash in Luna, hoping it will reach the moon, as the name implies. The foundation bought BTC as hedge in case Luna/Terra goes haywire.
On the second point, to be fair you can look at the UST graph and see that someone did indeed burn a tonne of Luna to support UST. It's probably impossible to really prove that every penny went to supporting it, and it's probably impossible/unlikely that Do Kwon really bankrupted himself for this, but at the very least we can say someone decided they were going down with the ship and set a lot of money on fire. Difficult to see who would've done that other than LFG.
Tether itself also had a dry run of the Tether collapse. It seems to mostly be holding steadyish in the past few days, but the dip down to $0.95 is a giant screaming alarm. It's still only at $0.9990; before the crisis last week it was pretty much always at $0.9998 or above.
Tether is atleast supported with real world assets (USD/bonds etc). The amount and quality of the assets might be debatable but it can't go into a death spiral to zero like Luna and UST.
I'm confused. I understand wanting to have a reserve fund to help maintain a peg. National currencies do this as well, including selling their reserves to prop up their own currency when needed.
However, why would a stablecoin put its reserved in Bitcoin; an asset that is highly correlated with the entire crypto ecosystem, and highly volatile relative to the asset against which they want to maintain a peg.
I don't understand, if $3B in bitcoin is sold to save UST we should also be able to see a equivalent of that $3B in Terra/Luna/UST buys?
I don't understand crypto, and or how the Luna/UST works, but if you supported/buy something this should be visible, not only in vanished bitcoins, or am I mistaken?
It was supposed to be quicker, and automatic, to prevent the collapse, but it's a relatively new system and still under manual control. In theory some set of humans have been tasked with slowly buying more and more UST to build up confidence, and restore the peg. This can't really happen because LUNA is worth basically zero now, but who knows.
As of writing, CoinMarketCap values TerraUST (the stablecoin) at $0.09. Needless to say, that 3B didn't do a damn thing. No amount of cash infusions are going to save Terra, because the problem is trust.
I'm kind of amazed that the Bitcoin price wasn't affected more given this event as well as the larger macro events with the stock markets, Fed and inflation.
What's everyone's thoughts on Gemini dollar? Gemini claims [1] that GUSD is FDIC insured up to $250K and audited [2] by a third party called BMP [3]. I also remember reading that Gemini is used by a number of IRA custodians, so I'd assume that they're pretty heavily regulated.
This is puzzling. What did they do with the money? Buy back UST? Something else?
Vast numbers of LUNA were minted during the collapse. There are now 6 trillion LUNA outstanding, currently valued at $0.0002246 each. Apparently the algorithm trying to support UST did so by minting LUNA.
Does someone have a timeline of the collapse? All the data should be available on blockchains.
There was a peer-to-peer network solution that was associated with this "Luna" cryptocurrency that has been discussed on HN several times. The network did not have any ostensible connection to a cryptocurrency, it looked like just another p2p software project on the surface, but if one read all the documentation one could discover the connection to "Luna". Wondering if anyone remembers the name.
Calling it short is underselling it (lame pun not intended). This was allowing friends & family to cash out, leaving the rest of the public high and dry.
in a regulated market all you would simply have are some codified fiduciary duties and standardized disclosures
Terra Luna and TerraUSD's algorithmic operations were all disclosed publicly and scrutinized in the open sphere
Do Kwon stated publicly why he was buying the bitcoin - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg - and Do Kwon has stated publicly now why the bitcoin sold - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg
I think in a regulated market he just walks away just like all investment banks and bankers do
There are plenty of Exchange Traded Notes (ETNs) that obtusely say "this is dogshit and its going to fall to zero during a period of volatility" and then fall to zero during a period of volatility
Thats exactly what Terra Luna and TerraUSD did
all regulation would do is standardize the way the disclosure is done, really the most likely thing that comes from this is a regulator mandated additional sentence in a brokerage firm's 40 page disclaimer that you surely will read after consulting your financial advisor.
I understand it was Citadel that accelerated the demise of UST. This is pure hearsay at this point. But we can't rule out that there was a coordinated or massive attack on the stablecoin algo.
[+] [-] joosters|3 years ago|reply
It's hard to show that they really sold these coins. Certainly, the LFG transferred the coins to some different exchanges. But did they truly sell them?
If I was running a dodgy ponzi scheme and saw it collapsing catastrophically, I don't think I'd be throwing good money after bad trying to futilely patch it up. Much better to stash the remaining assets away somewhere and personally cash out later on.
Also, “In a sense, the market is going to take that as kind of bullish.” - a.k.a. the standard 'this is good for bitcoin' quote, applicable whatever the news is!
[+] [-] eric_cc|3 years ago|reply
A total ponzi scam coin crashed. This IS good for Bitcoin. Bitcoin is not Luna nor is it one of the thousands of other garbage scam coins. The faster those coins are proven scams the better.
Too many people falsely equate "Bitcoin === Crypto".. or "a fan of bitcoin is a fan of all crypto".
So I'd bounce this back to you: How is Luna's Ponzi crash NOT good for bitcoin?
[+] [-] NelsonMinar|3 years ago|reply
[+] [-] lamontcg|3 years ago|reply
I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets.
There's probably going to be a positive bounce just because markets don't move in straight lines.
There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start melting down again (nothing is ever a sure bet), but it feels like we're closer to hitting a point of selling exhaustion and an inflection point of negative sentiment.
[+] [-] Nuzzerino|3 years ago|reply
[+] [-] gjvc|3 years ago|reply
Good observation. I may not be Warren Buffet, but it angers me greatly to see this kind of moronic chatter masquerading as informed opinion on finance or market dynamics.
[+] [-] nullc|3 years ago|reply
[+] [-] SkipperCat|3 years ago|reply
I’m sorry all crypto believers. There’s just too much chaos in crypto world for this to be anything more than a gold rush.
[+] [-] this_user|3 years ago|reply
[+] [-] jrsj|3 years ago|reply
[+] [-] DonHopkins|3 years ago|reply
The Levenshtein distance from bullish to bullshit is only 3.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] vmception|3 years ago|reply
Yes all weekend I had been wondering and cautious based on how much bitcoin was left to sell! Its just a commodity, supply can be faster than demand, specifically when one whale is expected to flood the market
Terra Luna rallied 500x (50,000%) off the lows. Minting many millionaires that bought that dip. The rumors were that the recovery plan involved a bunch of the bitcoin collateral. I couldn’t verify that well.
Knowing its all gone (or the selling pressure is done, whether you believe it was sold or not) is very helpful
Terra Luna resumes its crash too
[+] [-] low_tech_love|3 years ago|reply
Oh yeah sure they saw their coin going to s*%t and thought “yeah let’s just throw away a couple billion dollars just so people won’t think we are scammers”. Sure. The Vatican has started a process to canonize these saints.
[+] [-] vmception|3 years ago|reply
Terra Luna was already stupid enough, its stupid to make this part controversial because that was the purpose of this collateral, just as its stupid to not believe the bitcoin was sold after transfer to the exchanges (many people believe that its still owned, or was given to some whales to bail just them out, or the founder keeps it for himself)
https://bitcoinist.com/terra-luna-will-buy-10-billion-worth-...
https://www.bloomberg.com/news/newsletters/2022-04-19/crypto...
[+] [-] vmception|3 years ago|reply
Following months of outcry about the unsustainable nature of Terra Luna, Do Kwon through his foundation tried to partially collateralize the stablecoin with bitcoin, with a goal of buying up to $10bn of bitcoin. He got $3-5bn (at the time, price changed a lot), and this prolonged the confidence system for one additional month.
And then it imploded and sold the collateral, of course it was partial collateral so it failed to do anything in a bank run.
So it doesnt matter whether we get records from exchanges or not. Nothing different would happen. People want to see Do Kwon have more reasons to have charges against him, but there’s no need to attribute it to malice, everything can be explained by incompetence already.
[+] [-] lvass|3 years ago|reply
It matters a lot. The rumor mill has it LFG directly rescued a few whales in the first sign of crisis. This is a very serious accusation I'd urge no one proclaim without definite proof.
If they concentrated their usage of the reserves to keep the peg earlier, possibly anyone selling below $1 would take an immediate loss and no noticeable depeg would even happen. The way it was handled is extremely useful information to markets and particularly to market makers.
[+] [-] vkou|3 years ago|reply
He's not stupid, he's just a predator, and just like any other predator, belongs in prison.
[+] [-] aqme28|3 years ago|reply
Does there need to be malice rather than incompetence, for charges to be filed?
[+] [-] quasse|3 years ago|reply
* Where did this foundation get $3B to buy Bitcoin?
* Is there any proof at all that they traded it to a counterparty who actually attempted to prop up UST and didn't just run off with them?
[+] [-] woodruffw|3 years ago|reply
This brings up an exceedingly funny point: blockchains excel at making every transaction public (a property that nearly nobody actually wants) and simultaneously offering complete privacy to institutional actors.
In other words: privacy for me, but not for thee.
[+] [-] folli|3 years ago|reply
* No, there's no proof.
[+] [-] Traster|3 years ago|reply
[+] [-] georgeecollins|3 years ago|reply
[+] [-] NelsonMinar|3 years ago|reply
[+] [-] calbruin|3 years ago|reply
[+] [-] wing-_-nuts|3 years ago|reply
[+] [-] realusername|3 years ago|reply
[+] [-] helsinkiandrew|3 years ago|reply
[+] [-] nathanvanfleet|3 years ago|reply
[+] [-] gizmo686|3 years ago|reply
However, why would a stablecoin put its reserved in Bitcoin; an asset that is highly correlated with the entire crypto ecosystem, and highly volatile relative to the asset against which they want to maintain a peg.
[+] [-] djantje|3 years ago|reply
I don't understand crypto, and or how the Luna/UST works, but if you supported/buy something this should be visible, not only in vanished bitcoins, or am I mistaken?
[+] [-] px43|3 years ago|reply
[+] [-] netheril96|3 years ago|reply
[+] [-] jallen_dot_dev|3 years ago|reply
[+] [-] _fat_santa|3 years ago|reply
[+] [-] koolba|3 years ago|reply
If it propped it up long enough for insiders to dump their positions it did it’s served it’s purpose.
[+] [-] latchkey|3 years ago|reply
[+] [-] sakopov|3 years ago|reply
[1] https://www.gemini.com/dollar
[2] https://assets.ctfassets.net/jg6lo9a2ukvr/VOtyB4tBb0G4FVt6Eq...
[3] https://www.bpm.com/
[+] [-] lubesGordi|3 years ago|reply
[+] [-] Animats|3 years ago|reply
Vast numbers of LUNA were minted during the collapse. There are now 6 trillion LUNA outstanding, currently valued at $0.0002246 each. Apparently the algorithm trying to support UST did so by minting LUNA.
Does someone have a timeline of the collapse? All the data should be available on blockchains.
[+] [-] 1vuio0pswjnm7|3 years ago|reply
[+] [-] snotrockets|3 years ago|reply
[+] [-] dstroot|3 years ago|reply
[+] [-] vmception|3 years ago|reply
Terra Luna and TerraUSD's algorithmic operations were all disclosed publicly and scrutinized in the open sphere
Do Kwon stated publicly why he was buying the bitcoin - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg - and Do Kwon has stated publicly now why the bitcoin sold - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg
I think in a regulated market he just walks away just like all investment banks and bankers do
There are plenty of Exchange Traded Notes (ETNs) that obtusely say "this is dogshit and its going to fall to zero during a period of volatility" and then fall to zero during a period of volatility
Thats exactly what Terra Luna and TerraUSD did
all regulation would do is standardize the way the disclosure is done, really the most likely thing that comes from this is a regulator mandated additional sentence in a brokerage firm's 40 page disclaimer that you surely will read after consulting your financial advisor.
Its up to the consumer/investor, it always is.
[+] [-] xbar|3 years ago|reply
The veritable tautology in that statement would be amusing except for the sad fact that a great many ignorant investors were fleeced in this process.
[+] [-] muttantt|3 years ago|reply
[+] [-] loeg|3 years ago|reply
[+] [-] anonu|3 years ago|reply
[+] [-] stjohnswarts|3 years ago|reply