In May, Luna Foundation Guard published an audit of its book outlining the defence of the UST peg.
According to an audit issued by Luna Foundation Guard (LFG), a non-profit organisation founded in January to develop the Terra ecosystem, $2.8 billion in bitcoin and stablecoins were used to defend the TerraUSD (UST) stablecoin peg during the May crash.
As one of its responsibilities, LFG was established to protect the UST peg. The group kept bitcoin, stablecoins, and other cryptocurrencies to support the dollar-to-UST peg.
A statement released by LFG on Wednesday revealed that JS Held carried out the audit.
According to the audit report, LFG spent $2.8 billion, or 80,081 BTC and $49.8 million in stablecoins, to defend the UST peg.
This defence took place during the May death spiral of the Terra environment. When UST lost parity with the dollar, the Terra ecosystem collapsed, including its leading cryptocurrency, Luna.
Terraform Labs Also Tried to Defend the UST Peg
The study noted that in addition to LFG’s efforts, Terraform Labs, led by Do Kwon, also attempted to defend the UST peg.
According to reports, Terraform Labs used $613 million of its own money to support the UST peg.
Claims that LFG and Terraform Labs stole money during the UST de-peg incident were refuted by the JS Held audit report.
The audit report noted, “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.”
|Holding Name||Beginning Balance||Ending Balance|
LFG balances between May 7 and May 16: JS Held audit of LFG’s books
The Audit Report Supports LFG’s Position Against Korean Authorities Accusations
Back in September, there were rumours that LFG had access to another wallet. According to the source, the wallet contained over 3,300 BTC, which Korean authorities attempted to freeze.
At the time, LFG rejected the claim, and the audit report released today backed up that denial by noting that the company hasn’t moved any money since May 16.
In his response to the audit report, Kwon stressed the significance of differentiating between the Terra collapse and FTX’s bankruptcy.
“While there have been multiple recent failures in crypto, it is important to distinguish between Terra’s case, where a transparent, open-source decentralised stablecoin failed to maintain peg parity and its creators spent proprietary capital to try to defend it, and the failure of centralised custodial platforms where its operators misused other people’s money (customer funds) for financial gain,” said Kwon.
Now that the audit has been made public, the focus may turn to efforts to compensate customers whose use of Terra was negatively impacted by the collapse of the ecosystem.
LFG previously put off work on compensation due to litigation being brought by harmed parties.