In 229 DR, the Moonclaw made their sudden appearance in the streets of Hastarl, well equipped and armed. They soon gained control of many illegal affairs in the city and recruited many members. This was a big problem for many independent thieves, so two of the the most notorious, Farl and Eladar the Dark, convinced many of the remaining independent thieves to form a rival guild, the Velvet Hands. They suspected that the Moonclaw were agents of some powerful government officers or of a Magelord.
Despite their resources and the complicity of the guards, the Moonclaw gradually lost to the Velvet Hands. In 240 DR, the guild was finally destroyed. It was discovered that the leader of the Moonclaw, Isparla the Winding, was in fact one of the mistresses of the king. This confirmed the connection between the Moonclaw and the government.