CoinShares Reveals It Lost $21.45M to UST crash, Dunamu Refutes Claims of Netting $105M Profit from LUNC Investment

The list of institutional investors that made losses due to exposure to Terra assets which plunged in the second half of last month, has continued growing. Asset manager CoinShares disclosed this week that its finances were significantly affected. In South Korea, fintech giant Dunamu shot down allegations that it benefited massively from a past investment in LUNC, previously LUNA.

CoinShares lost as much as $21M from the Terra collapse

Digital asset management firm CoinShares on Tuesday shared its annual financial report in which it revealed it suffered a loss to the tune of $21.45 million as a result of the UST depeg. CEO Jean-Marie Mognetti, who described the loss as a ‘humbling lesson,’ explained that the firm did not have direct exposure to Terra (LUNA), which hemorrhaged value at the height of the collapse.

The asset manager, however, ran a book with exposure to Terra’s now-defunct algorithmic stablecoin. The loss doesn’t come as a surprise as the firm has a heavy involvement in the crypto and decentralized finance sector. Conceding that the negative returns would have an effect on the firm’s performance this quarter, Mognetti assured clients that the damage didn’t extend to additional capital markets activities

“While this obviously impacts the group’s performance for Q2, this loss has not had any impact on any of our additional capital markets activities, nor does it in any way impact upon the hedging and collateralization of any of the group’s ETPs.”

He also revealed that the firm has since set measures in preparation for a possible similar occurrence. Mognetti explained the timing of the report saying that he didn’t want to wait until the end of the current quarter to report the loss. CoinShare isn’t the only institutional investor that took a financial hit owing to the UST meltdown. Delphi Digital also published a report on May 18 disclosing that its $10 million investment in Luna Foundation Guard (LFG) vanished.

Dunamu denies claims that it got a profit of $100M on a Luna Classic investment

South Korean fintech business company Dunamu has clarified that it didn’t book an estimated profit of $105 million from exposure to the now-defunct Terra assets. Dunamu, which operates the country’s largest crypto trading platform Upbit, categorically rebutted the reports published by local outlets last week.

The reports alleged that the company’s investment arm, one month after being founded in March 2018, acquired about 20 million LUNC tokens when they traded at $0.13. The subsidiary spent $2.61 million, more than 60% of the firm’s initial capital, to complete the purchase but sold the whole chest last February. In the notice shared on Tuesday, Dunamu said it didn’t have any input or influence on the investment play.

The parent company swapped LUNC into 2081.8500 Bitcoins and was rewarded a 25% discount on the then market price by the exchange. The swapped Bitcoin is still under the firm’s custody, Dunamu confirmed, adding that local regulators have outlawed corporate entities from trading crypto with the domestic currency. The company explicated that it recorded an unrealized profit of $33 million from the investment after deduction of tax and other expenses incurred.

Terraform Labs allegedly laundered $4.8M via a Korean shell company

Accusations of fraud against Do Kwon and his firm Terraform Labs have continued piling up in the aftermath of Terra’s demise. Local publication KBS News on Monday reported that the blockchain firm colluded with a blockchain consultancy institution to launder $4.8 million.

The report cited a former developer at the blockchain firm who said that Terra associated with the company operated under the name Kernel Labs. The news outlet added that the National Tax turned up a transaction of 6 billion won ($4.8 million) to the company, logged under other expenses. Terra Research Forum’s member FatMan Terra corroborated links between the two companies in a Twitter thread.

This week, local tax authorities reported that the Luna Foundation Guard had suspicious dealing with Kernel Labs and got a penalty for tax evasion offences last year on the same. This is not the first accusation to be laid against Do Kwon. The pseudonymous user previously accused the Terra chief of fraud via Mirror Protocol and recently Anchor Protocol.