Terra Luna's former co-founder, Do Kwon, who lost $11 million in the bet, is currently wanted by Interpol and is reportedly hiding in Serbia.
Approximately one year prior, on Mar. 14, 2022, cryptocurrency trader GiganticRebirth (GCR) invited the then co-founder of CEO of Terraform Labs, Do Kwon, in a $10 million bet that the price of Terra Luna (LUNC) would be lower than its then price of $92.4 per token one year later. The blockchain executive accepted the offer, the second in the series after the day prior, when cryptocurrency trader Algod offered a $1 million bet that LUNC would be lower than $88 per token on Mar. 13, 2023, to which Kwon also accepted, resulting in two bets worth $11 million and prize money pool of $22 million .
The funds, which totaled $22 million from all participants, were held in escrow by blockchain personality Cobie on their Ethereum address. Cobie claimed at the time, 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 and substantiated by blockchain data, the blockchain personality paid out the bets from the hot wallet in April 2022, 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 Dec. 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 is currently trading at $0.000124 per token.
Last Nov. 2022, cryptocurrency exchange FTX, then 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 Apr. 4, 2022, Cobie transferred the prize money and principal, worth $22 million in stablecoins, to winners GCR and Algod via FTX. The subsequent flow of funds is unclear.
On Sept. 26, 2022, Interpol issued a red notice arrest warrant for Do Kwon per 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. Aside from being out $11 million from the bets, the U.S. Federal Bureau of Investigation and Department of Justice reportedly began probing Terra Luna's collapse on Mar. 14, 2023. One month prior, 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