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Find out the real culprit that caused the downfall of LUNA and UST

After some time has passed, surely you are still shocked and the vast majority have lost faith in stablecoins one hundred percent, since the collapse of LUNA and UST.

However, above all that is what we are interested in right now, about the collapse of LUNA and UST whether it is precisely caused by a good organization or individual, the real culprit causing a hole. black “death” for LUNA and UST investors in particular, and affects the entire cryptocurrency market in general.

As reported by Uppsala Security on June 14, the cause of the collapse of LUNA and UST was at the hands of Terraform Labs (TFL) or Luna Foundation Guard (LFG), the actions of a in these two organizations was started on May 7th. Perhaps even more profoundly, the demise of LUNA and UST involved a handshake between the two organizations.

So what is the truth about this story, you and I will go to find out the details in this article!

What is Uppsala Security?

Uppsala Security is an organization developed to prevent possible or already occurring criminal activities, and minimize damage when they do, by using reasonably effective security solutions.

Founded in early 2018, Uppsala Security built the threat Intelligence platform – a model supported & reported by the community, the organization’s original name was Sentinel Protocol. Developed by a team of researchers and security analysts.

Explain the terms and summarize the main causes of the cash flow that caused LUNA & UST to collapse

In this section, through on-chain data revealed evidence pointing to the fact that Wallet A, the main account flagged as the main culprit of Terra’s big bang (LUNA), is in fact the This may be owned or controlled by Terraform Labs (TFL) or the Luna Foundation Guard (LFG) itself, or in association with their stakeholders (e.g. the ghost company “K”).

  1. Wallet A: 0x8d47f08ebc5554504742f547eb721a43d4947d0a

2. Wallet A (T): terra1yl8l5dzz4jhnzzh6jxq6pdezd2z4qgmgrdt82k

3. Binance User Account Memo Address: 104721486

(terra1ncjg4a59x2pgvqy9qjyqprlj8lrwshm0wleht5)

4. Binance User Account Memo Address: 100055002

(terra1ncjg4a59x2pgvqy9qjyqprlj8lrwshm0wleht5)

5. Depositors: terra13s4gwzxv6dycfctvddfuy6r3zm7d6zklynzzj5 (LUNC DAO),

terra1t0an4m6t47rp3mj57rdfzw6dpd3lw8erxjppgw

6. Interchange Wallet A: 0xa046a8660e66d178ee07ec97c585eeb6aa18c26c

7. Exchange Wallet A: 0x21ec2dbb3bfd2210a84bbc924466a70becddd572

We will go to find out, check the actions taken by these wallets until the day Terra (LUNA) is “exploded“, as well as the connection between the above addresses and their link with wallets controlled by TFL & LFG, based on on-chain data.

Below is an overview of the cash flow movement closely linked to TFL & LFG:

Overview of the Flow of Funds closely linked to TFL_LFG
Overview of the Flow of Funds closely linked to TFL_LFG

Number of stablecoins put into TFL & LFG wallets:

Source: Uppsala Security Crypto Incident Response Center (CIRC)

As we can see in the photo above, for example, the amount of USDT withdrawn from Exchange Wallet A, started depositing and withdrawing a large amount of USDT & USDC since May 4th. Before the “explosion” of Terra (LUNA), also before UST de-peg.

The amount of USDT withdrawn from Exchange Wallet A, started depositing and withdrawing a large amount of USDT & USDC since May 4th.
The amount of USDT withdrawn from Exchange Wallet A, started depositing and withdrawing a large amount of USDT & USDC since May 4th.

Journey to discover Wallet A “mysterious”

From May 7 to May 9, a series of events involving pools on Curve about maintaining UST’s peg with other stablecoins triggered UST’s de-peg.

In particular, there are two transactions below that are considered as the first two important transactions in enabling de-peg for UST.

  • On May 07, around 21:44 UTC, a wallet linked to TFL removed approximately 150 million UST from Liquidity Pools (3Pools) on Curve.
  • On May 07, around 21:57 UTC, Wallet A swapped approximately 85 million UST for USD Coin (USDC) in Curve’s 3pools, and then transferred this USDC to Coinbase users’ wallets, wallet addresses. USDC kernel: 0xc2531a47f9767c83497d661f0b57182156d47615
Figure 1: illustration of 85 million USDC transferred to users wallets on Coinbase – Source: uppsala
Figure 1: illustration of 85 million USDC transferred to users wallets on Coinbase – Source: uppsala

Next is the proof of this “swap” transaction!

Next is the proof of this “swap” transaction!

With all the USDC that has been swapped and transferred to Coinbase, you can refer to the Wallet A address and the USDC receiving address I have noted above.

Discovering more information about Wallet A and its subsequent activities is difficult due to Coinbase’s policy in place, so it cannot be retrieved.

Therefore, we will continue to trace the source of Wallet A funds, but suddenly observed that Wallet A on Ethereum mainnet received all funds from Terra mainnet (Terra Classic now), via Wormhole – a bridge between blockchains (Solana, Terra, Ethereum, Cosmos..).

The relevant wallet on the Terra mainnet side is identified as Wallet A(T).

Figure 2 – Initial migration of Wallet A (T)
Figure 2 – Initial migration of Wallet A (T)

Looking at the transaction history above, and checking the transaction history on Wallet A (T) you can notice that Wallet A (T) has deposited UST into a Binance user account with the Memo number as: 104721486 (each account has only one Memo format).

Memo address: 104721486 started accepting into UST since May 1st and through 36 transactions sent to and received a total amount of 123,597,800 UST until May 25th.

Below is a picture of the transaction history of the Memo address 104721486:

Image of transaction history of Memo address 104721486:
Image of transaction history of Memo address 104721486.

Some notable things after observing the transaction history statistics table of Memo 104721486 include:

  • Wallet A (T), is the one who deposited the most UST into Memo 104721486 with a total amount of 118,301,352 UST, which accounts for most of the total UST received by Memo 104721486 of 123,597,800 UST.
  • Wallet A(T) sent a total amount of 108,251,326 UST to Memo 104721486 on May 7th alone, the start date of the de-peg UST event with only 10 transactions, to Memo 104721486. this, at 21:44 UTC, when TFL first removed 150 million USTs from liquidity pools on Curve, this indicates to some extent that Wallet A (T) and Memo 104721486 may have known about the issue. eliminate upcoming UST liquidity.
  • There are three unique sender addresses: “terra13s, terra1fr, terra1t0”, who first started depositing UST into Memo 104721486 in small amounts of UST on 05/01/2022, all on the same day. Looks a lot like a test deposit, a trick that experienced, and carefully tested for large sums of money are about to be loaded into a new, often used wallet.

According to LUNC DAO’s tweet, the address “terra13s” – belonging to the Depositors group mentioned above, has made the first UST deposit into Memo 104721486, this address is controlled by LUNC DAO itself.

Therefore, next we will have to take a closer look at the “terra13s” address (controlled by the LUNC DAO itself).

Turn to find every nook and cranny, anatomy “terra13s

After taking a closer look at “terra13s”, for its historical cash flow before that, it can be seen that it sent 19.08 million LUNA (LUNC now) to another wallet “terra17p”, as shown below:

Figure 3: “terra13s” (LUNC DAO) converts 19.08m LUNA to “terra17p” (Source: Bitquery)
Figure 3: “terra13s” (LUNC DAO) converts 19.08m LUNA to “terra17p” (Source: Bitquery)

In addition, “terra17p” traded a total of 100m LUNA against “terra1gr”, according to Terra’s tweet, this is identified as LFG wallet, so now there is a connection between “terra13s” (LUNC DAO), “terra17p” and “terra1gr” (LFG wallet).

Figure 4: “terra17p” transfers 100m LUNA to “terra1gr” (LFG wallet) (Source: Bitquery)
Figure 4: “terra17p” transfers 100m LUNA to “terra1gr” (LFG wallet) (Source: Bitquery)

Recent acts and activities suggest a handshake of this group of people, which includes both TFL and LFG, and it can be seen that LUNC seems to have been built before the demise of LUNA and UST took place at the beginning.

We’ll take a closer look at the activity of those who deposited money on Memo address 104721486, which was linked to another Binance user account, with Memo address: 100055002.

Memo address 100055002 started receiving UST from 08/10/2021 and through 226 incoming transactions, received a total amount of 2,665,579,215 UST until 03/05/2022.

Next, we learn the transaction history and behavior between these two Memo accounts.

Table A: UST transaction history of Binance Deposit Memo wallet: 100055002

Table A: UST transaction history of Binance Deposit Memo wallet: 100055002
Table A: UST transaction history of Binance Deposit Memo wallet: 100055002
  • The first wallet to deposit money into Memo 100055002 was “terra13s” (LUNC DAO), also the first wallet to deposit money into Memo 104721486.
  • Terra1t0,” is the third depositor to Memo 104721486, this address also appears in Memo 100055002 as the second deposit.
  • Terra17p”, which trades a large amount of LUNA with both “terra13s” (LUNC DAO) and “terra1gr” (LFG wallet) (as shown in Figures 3 & 4), appears as a sender of large amounts of UST into Memo 100055002 (as marked in Table A).

Table B: Behavior Analysis Between Binance Memo User Accounts: 104721486 and 100055002

Memo’s first Five transactions 104721486 (Wallet A Main Deposit Wallet on Binance)

Memo First Five Transactions 104721486

Memo’s first Four transactions 100055002

Memo's first Four transactions 100055002
  • Looking at Table A, we can see the behavior in Memo address 104721486, the amount sent to the original 10 USTs, almost identifiable as test sent, sent before even “terra13s” ( LUNC DAO) and “terra1t0” before larger funds are subsequently transferred.
  • Similar to the initial transactions observed in Memo 104721486, the transfers made by “terra13s” (LUNC DAO) and “terra1t0” into Memo 100055002 both occurred on the same day (October 8/ 2021), within an hour and a half.

In addition, recently, the Terra community has also rumored that “terra13s” may belong to the Kucoin exchange. However, this is currently unconfirmed.

The Terra community has also rumored that "terra13s" may belong to the Kucoin exchange.
The Terra community has also rumored that “terra13s” may belong to the Kucoin exchange.

Conclusion

Summary of the problems solved in the article:

  • The main cause of the collapse of LUNA & UST was caused by the hands of the owner of Wallet A and the wallet of LFG.
  • User accounts Binance Memo: 104721486 and Memo: 100055002 have received a large number of USTs (totaling 123,597,800 UST and 2,665,579,215 UST) until May 2022.
  • Terra13s” (LUNC DAO) and “terra1t0” appear as the first and earliest depositors of both Memo: 104721486 and Memo: 100055002 .
  • Next, “terra13s” (LUNC DAO) traded a large amount of LUNA against “terra17p” , in turn “terra17p”, they traded a large amount of LUNA against “terra1gr” (LFG wallet).
  • Terra17p” deposited a large amount of UST directly into Memo: 100055002, which acted as a link and exchange between “terra1gr” (LFG’s wallet) and Memo: 100055002.
  • Wallet A(T) deposited 108,251,326 UST into Memo: 104721486 on 07/05, from 04:57 UTC to 21:40 UTC, just minutes before TFL removed 150 million UST from liquidity pools on Curve (3pools) .

In addition, the accounts mentioned above show a strong connection to each other. Although things happened very quickly, they were designed in advance, before the UST de-peg event took place.

However, its consequences have led to a significant impact on the entire cryptocurrency market, as well as a series of subsequent stablecoins such as USDT, BUSD, USDC also gone out of $ value. 1 initial.

But perhaps, this is also a great lesson for most other investors, about whether to choose an algorithmic stablecoin, to make a stable asset, a method to preserve their assets or not, as well as the relationship between LUNA and UST.

The above is all information that GTA Research has researched and adds a little bit about the Uppsala Security report and is not investment advice. Hope this article will help you get the necessary information and give your personal opinion on future planning.