About one year ago, on March 14, 2022, cryptocurrency trader GiganticRebirth (GCR) invited the co-founder and then-CEO of Terraform Labs, Do Kwon, to bet $10 million that in a year the price of Terra Luna (LUNC) would be lower than its then-price of $92.4 per token.
The blockchain executive accepted the offer, the second in the series. The day before, cryptocurrency trader Algod offered a $1 million bet that LUNC would be lower than $88 per token on March 13, 2023, which Kwon also accepted. This resulted in two bets worth $11 million and a prize money pool of $22 million.
That $22 million was held in escrow by blockchain personality Cobie on his Ethereum address. Cobie claimed at the time that a hot wallet was given to participants “on my mobile phone while i was in the middle of africa, when i woke up there was $22m deposited.”
“i didn’t want 22m on a mobile tent while I was living in a tent amongst lions lmao.”
As told by Cobie, the blockchain personality paid out the bets shortly after the $40 billion LUNC and accompanying algorithmic stablecoin Terra USD (USTC) ecosystem imploded, with LUNC trading at fractional decimal values close to zero. However, Cobie also stated in December 2022:
“I actually paid out the bet shortly after Luna went to 0, and then bought enough Luna to hedge in case it somehow went back to $88. But I lost my hedge (custodied in FTX) so if Luna goes to $88 in the next 3 months I am fucked”
As the bet was active until mid-March of 2023, Cobie was required to hold collateral despite LUNC’s collapse, as the funds were paid out early, and conditions could differ at settlement. At the time of publication, LUNC was trading at $0.000124 per token.
Last November, cryptocurrency exchange FTX — then the third largest in the world by volume — filed for bankruptcy over allegations of misappropriating users’ funds and left the deposits of over 1 million creditors frozen. On April 4, 2022, Cobie transferred the prize money and principal, worth $22 million in stablecoins to FTX. The subsequent flow of funds as tracked by blockchain transactions is unclear.
On Sept. 26, 2022, Interpol issued a red notice arrest warrant for Do Kwon at the request of South Korean prosecutors over accusations of fraud relating to Terra Luna’s collapse. The former blockchain executive is reportedly hiding in Serbia, which does not have an extradition agreement with South Korea. The U.S. Federal Bureau of Investigation and Department of Justice reportedly began probing Terra Luna’s collapse on March 14, 2023. One month before that, the U.S. Securities and Exchange Commission charged Terraform Labs and former CEO Do Kwon with “defrauding investors in crypto schemes.”
A one year anniversary since my $1mn dollar bet with @stablekwon
while it’s in hindsight easy to say Luna would collapse as you can see in the comments i was ridiculed as redacted
the masses are often wrong, was a great lesson https://t.co/Elp9ZMGBTc
— Algod (@AlgodTrading) March 14, 2023