It has been reported that Luna Foundation Guard still has reserves for over a billion dollars. Now it admits it is left with just 313 Bitcoin after Terra and Luna crash.
There is a new statement from The Luna Foundation Guard (LFG), official stewards of Terra’s bitcoin reserves.
LFG tells us all how it disbursed millions of dollars worth of crypto in its failed attempt to prevent de-pegging of Terra’s stablecoin (UST) to dollar.
Then the ferocious attack destroyed not only the aforementioned peg but also managed to bring UST down. It caused Luna’s drastic inflation, but also made it theoretically possible to implement the 51% attack on the Terra’s blockchain. The blockchain was later halted.
How much money did LFG spent trying to protect UST and Luna? A lot.
Let’s take a look at the official statement, analyzed by CoinDesk.
LFG spent almost 80,000 BTC trying to stop Terra and Luna crash
In the statement, LFG notes that its BTC reserves have depleted almost entirely — from around 80,000 BTC to about 300. The remaining assets, which mostly comprise of the crashed UST and LUNA tokens, will apparently be used to compensate investors.
The $40 billion Terra ecosystem collapsed last week. The UST stablecoin — which is supposed to be worth $1 — dropped below 20 cents. The LUNA token, a sort of shock absorber for UST’s “algorithmic” dollar-pegging mechanism, crashed from $80 to below $0.002.
In a tweet on Monday, LFG said it sold off most of the BTC in its reserves for UST as Terra’s ecosystem was beginning to collapse early last week.
LFG said it transferred over 50,000 BTC “to trade with a counterparty” on May 8.
It said the funds were used for “directly executing on-chain swaps and transferring $BTC to a counterparty to enable them to enter trades with the Foundation in large size & on short notice.”
On May 12, another 30,000 BTC from its reserves were sold off, “in a last ditch effort to defend the peg.”
LFG confirmed the remainder of its reserves, which once totalled over $3 billion, have sunk almost completely as a result of the unsuccessful effort to defend UST.
LFG says these funds will be used “to compensate remaining users of UST, smallest holders first.”
Monday’s statement from LFG comes amid severe criticism.
Many users claim Terra’s reserve funds — which were supposed to belong to the “decentralized” Terra community — were handled with a lack of transparency by Terra’s centralized leaders and investors.