New Audit Report Shows Terra’s LFG Spent Over $2.8 Billion To Defend UST Peg ⋆ ZyCrypto

South Korean Authorities Seek To Revoke Terra Co-Creator Do Kwon’s Passport To Expedite Deportation

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Luna Foundation Guard (LFG), the entity behind the collapsed Terra ecosystem, spent $2.8B (80,081 BTC and 49.8M in stablecoins) to defend UST’s peg, a new report by London-based third-party auditing firm JS Held has shown. Further, the report notes that Terraform Labs (TFL), the developer of the Terra blockchain, went above and beyond to spend $613M of its capital to avert a de-peg of the TerraUSD (UST) stablecoin.

“The report shows that all LFG funds were spent to defend UST’s peg parity with the Dollar as declared and that LFG’s remaining balances are the only funds remaining,” LFG said in a statement.

UST, an algorithmic stablecoin backed by Bitcoin and designed to maintain its peg to the dollar through market forces, collapsed in May, leading to the meltdown of the $60 Billion Terra ecosystem and widespread contagion for the crypto market. To keep the stablecoin’s peg intact, LFG and TFL disbursed millions of dollars worth of crypto but failed.

Despite disclosing information aimed at demonstrating that market forces purely caused the situation, Terra users and regulators have maintained that there was a deal for insiders to exit with the bitcoin trove. Others felt that Terra and LFG were heavily involved in the ecosystem’s debacle for embezzling or misusing funds, while others claimed that LFG funds had been frozen by law enforcement. In the report, LFG clarified that all funds are kept in self-hosted wallets and have neither been frozen nor moved since May 16th.

“While there have been multiple recent failures in crypto, it is important to distinguish between Terra’s case, where a transparent, open-source decentralized stablecoin failed to maintain peg parity and its creators spent proprietary capital to try to defend it, and the failure of centralized custodial platforms where its operators misused other people’s money (customer funds) for financial gain,” said Do Kwon, Terraform Labs founder.

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While the disclosure could help reduce the burden of claims against Do Kwon and his associates, the developer’s whereabouts remain unknown. Not long ago, Kwon tweeted that they were defending themselves in multiple jurisdictions and “looked forward to clarifying the truth over the next few months.” Meanwhile, law enforcement agencies worldwide continue to hunt for him after Interpol reportedly issued a red notice in late September.

Source: https://zycrypto.com/new-audit-report-shows-terras-lfg-spent-over-2-8-billion-to-defend-ust-peg/