According to a news report from a local South Korean outlet, Terra Labs has nearly $3.6 billion in USDT and UST. The news report claims the money could be used for currency exchange and DeFi price manipulation or for money laundering. However, authorities will have to contact exchanges Binance, Coinbase, Huobi and Kucoin to confirm the same.
TerraForm Labs CEO, Do Kwon, has already revealed his holdings through his SNS of Terra Foundation. These include LUNA (Terra), UST (Terra USD) and BTC (Bitcoin). The company had to protect prices with cash they held in the event of UST (Terra USD) deflation.
However, on-chain data analysis revealed that wallets owned or operated by TerraForm Labs and Luna Foundation Guard (LFG) contained a large sum of money with unknown sources and information.
The total amount of illicit funds discovered in this way, including UST (Terra USD) and USDT (Tether), was $3.6 billion. Specifically, the report found that the money was being used to manipulate markets and launder money for the current LUNC (the previous LUNA) on DeFi and controlled exchanges.
After the Terra project crashed on May 7, blockchain security firms Uppsala Security and Coindesk Korea used on-chain data forensics to investigate how the network collapsed. They tracked the circulation of coins around a wallet identified by several researchers as the origin of the Terra crash. The wallet address is 0x8d47f08ebc5554504742f547eb721a43d4947d0a.
Consequently, it verified that Terraform Labs and Luna Foundation Guard had transferred USDT, USDC and UST worth $7.4 billion to two Binance wallets. On-chain data was used to prove that it was a wallet owned or controlled by (LFG).
Uppsala Security and CoinDesk Korea conducted additional on-chain data analysis to monitor the flow of unidentified cash worth approximately $3.6 billion.
Coincidentally, there were signs of UST deflation. On May 6, a day before LUNC collapsed, 300 million USDTs (about 380 billion won) were deposited into LFG’s exchange wallet, which could not be identified, and were found to have escaped into another Binance Exchange wallet. Since this fund has been transferred from the exchange wallet, it is no longer possible to track it with on-chain data analysis.