May 17, 2022
Luna Foundation Guard (LFG), a Singapore-based nonprofit that aims to maintain the price of TerraUSD, said Monday that it has spent the bulk of its bitcoin in a failed attempt to revive TerraUSD after its collapse.
The LFG has built up large reserves of cryptocurrencies, including more than 80,000 Bitcoins, to support the peg. Although the move failed, the LFG said it would use the few reserves it still has to compensate the remaining users of TerraUSD, starting with the smallest holders.
TerraUSD, a stablecoin crashed last week, sending cryptocurrencies plunging. TerraUSD lost its 1:1 dollar peg during the crash and is currently trading at about 5 cents, according to CoinGecko.
According to blockchain analytics firm Elliptic, holders of the TerraUSD coin and a linked token, Luna both lost around $42 billion last week.
“There seems to be little hope for those hoping that some of the reserves could be used to compensate users of the stablecoin since so little of it remains. Of course, we will wait to see whether LFG can provide proof to back up their statements,” said Tom Robinson, Chief Scientist and co-founder of Elliptic.
The sources for this piece include an article in Reuters.
