LFG Unpacks Bitcoin Activity During LUNA, UST Collapse

2022-05-16 20:1796150

Source: Decrypt

The Luna Foundation Guard (LFG), the non-profit organization overseeing the Terra ecosystem, said that its Bitcoin reserves dropped by more than 80,000 BTC over the last week.

Per LFG’s Twitter thread Monday, as of May 7, it held 80,394 BTC (more than $3 billion at that time) in its reserves and a selection of other cryptocurrencies, including BNB, USDT, USDC, AVAX, UST, and LUNA.

However, as of today, the organization’s remaining reserves include a mere 313 BTC or approximately $9.2 million at current prices, the organization said.

8/ As of now, the Foundation’s remaining reserves consist of the following assets:
· 313 $BTC
· 39,914 $BNB
· 1,973,554 $AVAX
· 1,847,079,725 $UST
· 222,713,007 $LUNA (of which 221,021,746 is currently staked with validators)

— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022

The wipe-out of more than 80,000 BTC follows the dramatic collapse of Terra’s UST algorithmic stablecoin and the network’s native token LUNA last week. UST, supposed to be pegged 1:1 to the U.S. dollar, went into a freefall to sink below $0.15, while LUNA crashed from about $80 to $0.0002, according to CoinMarketCap.

Since January, LFG has been accumulating its crypto reserves for a de-pegging scenario, with the funds ready to be deployed if UST slips below its $1 peg.

When the value of the UST stablecoin fell below its peg on May 9, the LFG said it would use as much as $1.5 billion in crypto, including $750 million in Bitcoin, to purchase UST and defend the stablecoin’s peg. This money was reportedly sent to an address owned by a “professional market maker” who would deploy funds on behalf of LFG.

What Happened to Terra’s Bitcoin Reserve as UST and LUNA Crashed

This was later confirmed by blockchain forensic firm Elliptic, which also said that on the same day, a further $930 million worth of Bitcoin was sent from multiple LFG-associated wallets to the market maker’s address.

This total of 52,189 Bitcoin, worth over $1.6 billion, was then moved to a single account at crypto exchange Gemini.

LFG confirmed the transaction today, saying that it transferred the 52,189 BTC in question “to trade with a counterparty… for an aggregate 1,515,689,462 UST.”

4/ LFG:
· Directly sold 26,281,671 $USDT & 23,555,590 $USDC for an aggregate 50,200,071 $UST
· Transferred 52,189 $BTC to trade with a counterparty, net of an excess of 5,313 $BTC that they have returned, for an aggregate 1,515,689,462 $UST

— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022

The organization further stated that on May 10, when UST's price had fallen below $0.07—in a last-ditch effort to defend the peg—Terraform Labs (TFL), the company developing the Terra blockchain, sold 33,206 BTC for an aggregate of 1,164,018,521 UST.

Despite all the emergency measures, UST’s collapse couldn’t be prevented, with today’s LFG statements sinking the price of the stablecoin from $0.20 to $0.12 at press time, per CoinMarketCap.

LFG also said that it was “looking to use its remaining assets to compensate remaining users of UST,” with the smallest holders served first.

The exact distribution methods are yet to be decided, though.

Likes 0
Favorite
Declaration: This article is published with the authorization. And it can't represent FTFTX's standpoint. Please note the source of article if it is reprinted: www.ftftx.com
All Comments(3)
Publish

APE DAO REMIX!

APE DAO REMIX!

Although the issuance of 1 billion is not much, so far it feels like it is not much different from similar projects.

05-16 20:20

Skvllpvnk

Skvllpvnk

Unexpected

05-16 20:19

Hellbringer

Hellbringer

( १д१)<

05-16 20:17
No More

FTFTX APP DownloadUse
iOS 9.0 and above
Android 4.3 and above

Feedback
Back