Global consulting firm JS Held has just released an audit claiming supporting data that the Luna Foundation Guard spent more than $2.8 billion from its own reserves in an unsuccessful attempt to revive the UST. Terraform Labs, under the leadership of Do Kwon, had also invested $613 million from its own stock exchange.
Terra had indeed tried to save the UST
Many months after this difficult event that signaled the start of the crypto winter, an audit firm published a detailed 16-page document proving that the Luna Foundation Guard had indeed attempted to save the UST and LUNA.
To give some context, the UST was an algorithmic stablecoin anchored to the price of the dollar and whose maintenance was ensured by the cryptocurrency LUNA via an arbitration system. Unfortunately, things got complicated and the 2 cryptocurrencies found themselves in a downward spiral following a massive sale of LUNA, and their respective courses collapsed within days.
Although things were then difficult to assess from an outside perspective, both the Terra project seemed solid if only given its market capitalization at the timeDo Kwon, the founder of Terra, spoke at the time in order to reassure investors, in particular through his tweet which has since become a meme, assuring that he ” deployed capital » :
Well today we know that the Luna Foundation Guard, the non-profit corporation responsible for maintaining the UST course, had indeed tried to save the UST course by leveraging $2.8 billion of its own reservesas the JS Held company audit shows us.
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This $2.8 billion was then made up of 80,081 units of Bitcoin (BTC) and $49.8 million in the form of stablecoins (USDT and USDC). Beyond the single case of the Luna Foundation Guard, Terraform Labsunder the direction of Do Kwon, had also tried to put out the fire by deploying $613 million from its own reserves.
Illustration of the various takeovers of UST by the Luna Foundation Guard
Thus, the report claims that with the available data, it is verifiable that the Luna Foundation Guard and Terraform Labs attempted – unsuccessfully – to save the algorithmic stablecoin:
“The report shows that all LFG funds have been expended to defend UST’s parity with the dollar as reported and that LFG’s remaining balances are the only funds remaining. »
Following the publication of this audit, Do Kwon spoke in order to draw the parallel with the FTX affair :
“While there have been multiple recent failures in crypto, it is important to distinguish between the case of Terra, where a transparent and open-source decentralized stablecoin failed to maintain parity and where its creators spent equity trying to defend it, and the failure of centralized custody platforms where its operators misused other people’s money (customer funds) for financial gain. »
👉 Related – Terra Classic (LUC) Developers Revise Burn Rate to Revive Blockchain
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Source: JS Held Audit
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