Terra Luna Foundation Guard Freezes $100M Compensation Treasury
The Luna Foundation Guard (LFG), a non-profit organization that supports the Terra ecosystem, has halted the planned distribution of $100 million from its reserve among small UST holders citing litigation concerns.
The organization announced the news in a Friday tweet, noting that they are freezing the distribution of LFG’s assets due to the threat of litigation. The LFG said they currently don’t have a specific date for when they might resume the distribution again.
“Our goal is to distribute LFG’s remaining assets to those impacted by the depeg, smallest holders first,” LFG tweeted. “Unfortunately, due to ongoing and threatened litigation, distribution is not possible at this time. While these matters are outstanding, there can be no timeline established for resolution.”
The foundation claimed that they are still determined to distribute LFG’s remaining assets among UST holders, starting with small ones.
3/ Our goal remains to distribute LFG’s remaining assets to small $UST holders. We will not stop advocating for our ability to follow through on these initial plans, and those waiting will be the first to know of new developments.— LFG | Luna Foundation Guard (@LFG_org) October 7, 2022
Following the unprecedented collapse of Terra’s algorithmic stablecoin, which wiped out around $60 billion from the crypto market, the LFG published a detailed report on how it spent its reserves to defend the UST peg. The foundation said that it will use the remaining assets, worth around $100 million, to compensate remaining UST holders.
Do Kwon Contradicts LFG, Says Funds Are Not Frozen
Terra founder Do Kwon has recently made comments that contradict the LFG’s claims. On Thursday, he said that his assets have not been frozen after reports alleging that South Korean prosecutors have frozen ₩56.2 billion ($39.9 million) in cryptoassets belonging to Kwon started circulating.
“Once again, I don’t even use Kucoin and OkEx, have no time to trade, no funds have been frozen,” he said in response to a tweet by CoinDesk that claimed prosecutors in South Korea have frozen around $40 million of Kwon’s funds. “I don’t know whose funds they’ve frozen, but good for them, hope they use it for good.”
A report by South Korean local media outlet News1 wrote on Wednesday that the LFG created a wallet holding some 3,313 BTC on the crypto exchange Binance one day after the arrest warrant for Kwon was issued. As per the report, some $27.6 million worth of BTC was then transferred from Binance to KuCoin and about 56.2 billion won to the OKX exchange in the following three days.
Kwon has gone head to head with South Korean regulators and various authorities In late September, the Seoul Southern District Prosecutor’s Office’s Financial and Securities Crime Unit confirmed that Interpol had issued a Red Notice – a high-level request for global police officers to “locate and provisionally arrest” Kwon “pending extradition, surrender, or similar legal action,” as reported.
Meanwhile, Terra’s LUNA token has failed to gain momentum since its launch more than four months ago. The coin is currently trading around $2.50, down by 87% compared to its all-time high of around $20.
On the other hand, Luna Classic (LUNC) has been able to gain more than 28,000% since touching its all-time low on May 13.