Luna Foundation Guard Spent Almost $3 Billion Worth Bitcoin in Failed UST Revival Attempt

Nitishkumar May 17, 2022
Updated 2022/05/17 at 11:12 PM

Luna Foundation Guard (LFG), the non-profit organisation set up to promote the growth of the Terra ecosystem has revealed in a Twitter thread that it had sold off almost its entire Bitcoin reserve in a failed attempt to prevent the meltdown of its native governance token LUNA and flagship stablecoin UST. LFG had revealed on May 7, the day before UST began to de-peg from its targeted $1 (roughly Rs. 78) parity, it had 80,394 Bitcoin — worth around $3 billion (roughly Rs. 23,355 crore) 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 Tether and USD Coin 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 stabilise 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 (roughly Rs. 71 crore) at current prices, about $11.7 million (roughly Rs. 91 crore) worth of BNB, $63.29 million (roughly Rs. 49,272 crore) 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 (roughly Rs. 630.5 crore), significantly down from the $4.1 billion (roughly Rs. 31,917 crore) they were worth at their height on May 3.

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.

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