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

The foundation had accumulated a total of more than 80,000 Bitcoin, worth over $3 billion (roughly Rs. 23,355 crore) last week.

By Shomik Sen Bhattacharjee | Updated: 17 May 2022 14:01 IST

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

Photo Credit: Twitter/ Luna Foundation Group

The Luna Foundation Guard (LFG) finally broke its silence on the state of its crypto reserves

Highlights

LFG plans to use its reserves to compensate UST's remaining users
LFG reportedly has only 313 Bitcoin left now
LFG held a reserve consisting of 80,394 BTC, other assets on May 7

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.

2/ Consistent with its non-profit mission & focus on the health of the Terra ecosystem, beginning on May 8, when the price of $UST began to drop substantially below one dollar, the Foundation began converting this reserve to $UST.
— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022

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

5b/ TFL, on behalf of the Foundation, executed the following exchange trades in a last ditch effort to defend the peg:
— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022

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.

7/ On May 12, LFG swapped 883,525,674 $UST to 221,021,746 $LUNA & staked this across a range of validators to protect against a possible governance attack as the amount of $LUNA continued to increase.

All transactions described above have now been completed.
— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022

9/ All assets will be returned to wallets tagged in https://t.co/PoDWOBJ1Rg shortly - the $LUNA previously staked is unbonding, and will be returned in 20 days.
— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022

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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