What we saw last month was a run on Crypto. We saw what can happen with no government backstop and no quality guarantees. We saw retail investors wiped out. We saw Crypto funds taking heavy losses. But there was no government bailout.

However, there was something that looked a lot like a bailout slightly earlier in the Luna timeline.

In February, the Luna Foundation Guard, the entity which was created to hold a Bitcoin reserve fund for the Luna protocol, raised $1B from investors including Jump Crypto and Three Arrows Capital. These funds were used to bolster the Bitcoin reserves with the intention of using them to defend the stablecoin peg.

In retrospect it’s pretty clear that this fundraise represented large Crypto funds bailing out Luna ahead of time.

The failing protocol also looked for an additional $1B in bailout funds from Crypto industry heavy hitters as the collapse was occuring. These industry bailouts have become reasonably common recently. Jump Crypto bailed out the Wormhole bridge to the tune of $320M after a hack drained its funds in February.

We need to pay attention to what is going on here.