This article comes from CNBC, Original Author: MacKenzie Sigalos

Odaily Translator |

Odaily Translator |Although the LUNA plunge caused most investors to suffer huge losses, some investment institutions made a fortune before the market crashed. The latest data shows that, among which Pantera Capital’s US$1.7 million investment in LUNA has achieved a 100-fold return. Hack VC and CMCC Global did not disclose the exact return, but only revealed that they will withdraw early in December 2021 and March 2022, respectively.

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Who made it out before LUNA crashed?

According to the data, the biggest winner in the LUNA flash crash may be Pantera Capital, an encrypted hedge fund that has achieved a return on investment of up to 100 times.

Joey Krug, co-chief investment officer of Pantera Capital, said that they sold about 87% of their LUNA positions from January 2021 to April 2022, and another 8% of their LUNA positions in May (when the market was in a state of collapse), Another 5% of LUNA positions are "stuck". But even if their “stuck” LUNA was worthless, based on the value of all those pre-sold positions, the crypto fund would have returned roughly $171 million on its initial investment in LUNA.

However, something is unusual, because Pantera Capital CEO Dan Morehead was still "touting" LUNA in December 2021. He called LUNA his preferred altcoin on the CNBC show when LUNA launched in 2021. It is up more than 15,800% year-on-year.

In response, Joey Krug explained that LUNA was liquidated early because they wanted to manage risk and rebalance the fund:

"For most of the tokens we sell in 2021 and part of 2022, it's a very simple risk management reason, LUNA keeps becoming a bigger and bigger part of the fund, so we have to reduce its risk, after all, in a You can’t let a single position get too big in a liquid hedge fund.”

After entering May, Pantera Capital noticed that LUNA could no longer maintain the peg exchange rate, so it decided to accelerate the selling. Joey Krug added:

“Usually when a Stablecoin breaks the peg, it definitely takes a big hit. Although Pantera Capital holds more LUNA (instead of UST), when UST is not trading at the peg there is bound to be more LUNA dynamically , thereby reducing the overall value. So basically, you need to sell LUNA so that the value is not diluted.”

Another successful escape from the LUNA debacle is Hong Kong venture capital firm CMCC Global, which was also one of the first seed investors in LUNA's parent company, Terraform Labs. Martin Baumann, the founder of CMCC Global, revealed that they sold their shares in March 2022 due to concerns about the previous due diligence of LUNA, but he said that the selling of shares had nothing to do with the technology behind UST, and was mainly related to regulatory changes. How worried.

Sources say CMCC Global cashed out when LUNA was priced at $100, but the agency said it would not comment on the returns or performance of individual investments.

Hack VC partner Rodney Yesep also did not respond to a request for comment on LUNA’s earnings figures, but he did say in a previous interview with the DeFi Decoded Podcast that Hack VC was one of Terra’s seed investors.

Other major backers of Terraform Labs include some well-known institutions and individuals in the venture capital field, such as Lightspeed Venture Partners and Coinbase Ventures. In addition, Three Arrows Capital and Jump Crypto also purchased LUNA tokens. It is not yet clear how these investment companies return on investment Performance.

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Open the road to redemption?

• Interestingly enough, Terra supporters have voted to get back on their feet, proposing to rebuild a new Terra blockchain and get rid of the LUNA Stablecoin that caused the original project to crash, which could mean redemption for both institutional and retail investors The opportunity to return investment returns, especially for those investment institutions that have suffered significant losses, project restarts may make up for initial investment losses, including Delphi Digital and Hashed Ventures——

• After miscalculating the risk of a death spiral event, Delphi Digital admitted it was "currently facing significant unrealized losses";

According to reports from Coindesk, Seoul-based Hashed Ventures lost more than $3.5 billion during the LUNA crash.

The Terra 2.0 proposal includes an airdrop plan to holders of the original LUNA (renamed "LUNA Classic") and UST tokens. If the price of the new Token rises, investors who suffer losses may have the opportunity to obtain redemption compensation. For crypto VCs who profited before LUNA collapsed, are they willing to support the Terra fork?

The answer does not seem optimistic.

Joey Krug said:

"Terra now has a new blockchain, and it looks like there will be a lot of Token airdrops, some of which will not be released in a few years. Pantera Capital has projects that integrate with Terra in its portfolio. I hope to see community-driven things in the future." Success here, but we are a fund that has nothing to do with new chains.”