Terra's LFG Reveals What Happened To Its Bitcoin Reserves
Crypto Briefing | May 16, 2022 07:36AM ET
The Luna Foundation Guard said that it had spent almost all of its Bitcoin in a failed attempt to defend UST’s peg. The Luna Foundation Guard revealed early Monday in a tweetstorm that it had sold off almost its entire Bitcoin reserve in the failed attempt to prevent the meltdown of its native governance token LUNA and flagship stablecoin UST. The Luna Foundation Guard has finally revealed what happened to its $3 billion Bitcoin reserve.
The LFG, a nonprofit organization tasked with protecting the dollar peg of Terra’s UST stablecoin, reported early Monday in a tweetstorm that it had spent almost all of its Bitcoin reserves in an attempt to protect UST’s peg.
The Foundation said that on May 7, or one day before UST began to de-peg from its targeted $1 parity, it had 80,394 Bitcoin (its largest holding worth around $3 billion at the time), along with approximately 26.2 million USDT, 23.5 million USDC, 1.9 million AVAX, 1.6 million LUNA, and 697,344 UST.
After UST began de-pegging on May 8, the LFG admitted to selling all of its USDT and USDC reserves for an aggregate of 50,200,071 UST and transferred 52,189 Bitcoin to trade with a counterparty for 1,515,689,462 UST.
After its actions had failed to stabilize the system, on May 10, the LFG exchanged an additional 33,206 Bitcoin for 1,164,018,521 UST in a last-ditch effort to defend the stablecoin’s peg.
According to the Foundation, this left it with only 313 Bitcoin worth around $9.2 million at current prices, about $11,7 million worth of BNB, $63,29 million worth of Avalanche, and an excess of LUNA and UST tokens worth almost nothing at current prices.
In total, LFG’s reserves are currently worth around $81 million, significantly down from the $4.1 billion they were worth at their height on May 3.
Get The News You Want
The LFG said it was looking to use its remaining assets “to compensate remaining users of $UST,” with the smallest holders being first in line. “We are still debating through various distribution methods,” the Foundation said, announcing that updates would follow soon.
The Monday report from LFG comes after the organization came under heavy fire on Twitter for the opaqueness of how it handled its reserves, with many in the crypto community wondering where $3 billion worth of Bitcoin went during Terra’s ecosystem-wide crash.
UST, which was already trading for pennies on the dollar, has plummeted by around 15% on the news, while LUNA has dipped around 3.6% following the announcement while trading 34% down on the day.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.