The audit also suggests that Terraform Labs (TFL), the developer of the Terra blockchain, spent $613 million trying to defend the peg. A stablecoin is an asset that is designed to mirror the value of another asset, commonly fiat currencies. UST was an algorithmic stablecoin, designed to maintain its peg through market forces.
The efforts of LFG and TFL ultimately failed, with the value of UST falling to zero as the $60 billion ecosystem met its demise. The collapse led to widespread contagion across the crypto industry, with numerous lenders, brokers and exchanges filing for bankruptcy protection due to exposure to the ecosystem.
“While there have been multiple recent failures in crypto, it is important to distinguish between Terra’s case, where a transparent, open-source decentralized stablecoin failed to maintain peg parity and its creators spent proprietary capital to try to defend it, and failure of centralized custodial platforms where its operators misused other people’s money (customer funds) for financial gain," said Do Kwon, Terraform Labs founder.
Do Kwon's location is unknown after Interpol issued a Red Notice to law enforcement agencies around the world.
CORRECTION (Nov. 16, 11:17 UTC): Corrects location of JS Held headquarters, an earlier version of the story said it is based in London.
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