Months after the collapse of Terra’s US dollar-pegged token UST, Luna Foundation Guard (LFG), the organization once created to protect the stablecoin, published an audit report audited by New York-based consulting firm JS Held. According to the report, LFG claims to have spent 80,081 bitcoins and 49.8 million stablecoins, which equates to about $2.8 billion, to secure UST’s stake.
LFG Audit by JS Held Litigation Group Defends UST Peg with $2.8 Billion in Crypto Assets
On November 16, 2022, months after the Terra stablecoin depegging incident in mid-May, Luna Foundation Guard (LFG) published a blog post about an audited transparency report that claimed the organization spent $2.8 billion in cryptocurrencies to defend UST. The once stablecoin UST is now called terrausd classic (USTC) and is currently trading at $0.02 per unit on November 16, 2022.
Terraform Labs co-founder Do Kwon also tweeted about the audit on Wednesday. “Third-party audit of LFG and TFL’s post defense performance released during May 2022” Kwon he tweeted. Co-creator of Terra he added:
Many of you have lost a lot of money on UST – sorry about that. Although the system is transparent and open source, as its creator I should have better understood and communicated its risks.
The report published by LFG states that the technical audit was conducted by the New York firm JS Held. He defends the actions of both LFG and Terraform Labs (TFL) during the UST depegging incident. LFG’s blog post states: “LFG has spent ~$2.8 billion (80,081 BTC and 49.8 million stablecoins) to defend UST, according to LFG’s tweets on May 16, 2022. “Furthermore, TFL went above and beyond and spent $613 million of its own capital to defend the UST pole.”
“We relied on various types of quantitative and qualitative data, including onchain data; TFL and LFG trading records obtained directly from exchanges JSH; and consultation with the TFL business”, JS Held explains the audit. The report also details that TFL maintained accounts on Binance that held BTC, ETH, BNB, USDT, BUSD, LUNA, and UST around May 8, 2022.
LFG says the audit rejects any allegations of misappropriation or misuse of funds, aiding insiders or freezing of LFG funds by law enforcement agencies. “The report shows that all LFG funds have been spent as announced to maintain the stable parity of the UST with the dollar, and the remaining LFG balances are the only funds left,” LFG said on Wednesday.
It was recently reported that Terraform Labs co-founder Daniel Shin (Shin Hyun-seung) raided Chia Corporation’s business this week over its ties to TFL and “unfair trade practices”. Other reports from local South Korean media claim that the more vocal Terralabs co-founder Do Kwon is hiding in Europe.
What do you think of LFG’s audit that says the organization spent over 80,000 bitcoins to defend UST’s pole? Let us know what you think about this topic in the comments section below.
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