As a long-term crypto investor with a keen interest in Terra’s ecosystem, I find the recent developments surrounding Luna Foundation Guard (LFG) and Terraform Labs (TFL) concerning. The news of LFG shifting its crypto holdings to a direct custody solution has sparked apprehension within the community due to TFL’s ongoing bankruptcy proceedings and the settlement with the U.S. Securities and Exchange Commission (SEC).
On Tuesday, Luna Foundation Guard, the affiliated non-profit of Terraform Labs, announced it transferred its cryptocurrency assets from self-managed wallets to a professional custody service. This decision was made post-settlement between Terraform Labs and Do Kwon with the U.S. Securities and Exchange Commission (SEC), resulting in a collective penalty payment of $4.5 billion in a civil fraud case.
Luna Foundation Guard (LFG) Shifts Funds
The Luna Foundation Guard (LFG), connected to Terra, transferred funds, including Bitcoin, to a new custodial arrangement, according to a statement they made on X platform on June 25th. This move has raised eyebrows among crypto investors due to the ongoing bankruptcy proceedings of Terraform Labs, which is in the process of liquidating its businesses and assets to fulfill a $4.5 billion settlement with the U.S. Securities and Exchange Commission (SEC).
LFG takes control over the cryptocurrencies like AVAX, BNB, BTC, LUNA, and UST (now USTC) directly, aiming to enhance the safety of users’ wallets. Not long ago, CoinGape disclosed that LFG moved a considerable sum, amounting to $94.7 million in crypto assets, to a different address. Among these were 1.974 million AVAX valued at around $71.19 million and approximately $23.5 million worth of BNB tokens.
The LFG Reserves Dashboard serves to monitor funds in wallets connected to LFG, ensuring transparency and traceability in the process. The aggregate reserve amount stands at $124.36 million, which includes $19.13 million in Bitcoin, $49.71 million in Avalanche (AVAX), and $32.87 million in BNB.
The CEO of Terraform Labs, Chris Amani, has confirmed that they have torched their LUNA reserves kept in wallets linked to TFL and LFG. Meanwhile, the Terran community of Luna Classic is also set to eliminate their LUNC and USTC tokens from designated wallets.
TFL Sells Major Crypto Projects
As the TFL CEO, I want to clarify that despite our recent settlement with the SEC, our offerings, including Pulsar Finance, Station Wallet, and Enterprise Protocol, will remain operational as we proceed with the wind-down process.
As an analyst, I’ve observed a significant decline in the value of the crypto assets held by the company. The cryptocurrency market is currently shrouded in uncertainty, with concerns over selloffs and pervasive negative sentiment contributing to this downturn. Specifically, AVAX has dropped by approximately 34% within the past month, while LUNA and USTC have experienced decreases of around 30% and 20%, respectively.
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2024-06-25 10:46