After several accusations of not being transparent in its dealings, the Luna Foundation Guard (LFG) has provided a detailed explanation of the expenditure of assets under its custody.
LFG is the organization responsible for securing the one dollar-peg of TerraUSD (UST), the algorithm-backed Stablecoin of the Terra ecosystem. The organization has acquired over 80,000 BTC, intended to be used in events of market conditions that could affect the value of TerraUSD.
That said, reports show that the organization has offloaded almost all of its Bitcoin holdings as it struggled to save the UST during last week’s meltdown.
LFG explained that its BTC expenditure occurred in three different operations. The first effort includes the sale of 26,281,671 USDT and 23,555,590 USDC, an aggregate total of 50,200,071 UST. This was the organization’s first effort to defend the de-peg incident seen last week. The organization noted that it “Transferred 52,189 BTC to trade with a[n undisclosed] counterparty, net of an excess of 5,313 BTC that they have returned, for an aggregate of 1,515,689,462 $UST.”
However, this effort went to waste as the peg was not restored and only worsened. LFG further revealed that Terraform Labs, the host company of LUNA and UST, sold the remaining BTC reserve on May 10, after UST dropped to $0.75. This transaction saw Terraform sell 33,206 BTC for an aggregate of 1,164,018,521 UST.
Luna Foundation Guard Still Holds Some Assets in Its Reserves
The LFG reserve now comprises only 313 BTC after the organization deployed most of the BTC in its reserves to defend the UST. That said, other currencies in its reserves include 39,914 BNB and 1,973,554 AVAX, which remained untouched through the ordeal. However, it remains unclear how the organization might use these tokens in the future.
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