Luna Guard Foundation Said They Sold Forex Reserve To Stabilize Luna USD (UST)

The Luna Guard Foundation (LGF), has released an update on its holdings. The release by the foundation published on May 16 said that its reserve held the following digital assets as of May 7: 80,394 $BTC, 39,914 $BNB, 26,281,671 $USDT, 23,555,590 $USDC, 1,973,554 $AVAX, 697,344 $UST and 1,691,261 $LUNA.

It added that the reserve was converted to UST from May 8, after the value of the algorithmic stablecoin started dropping below $1. It said that this is consistent with the policy of the foundation of being non-profit but fixated on the stability of the Terra ecosystem.

The update said,

“The Foundation did so by directly executing on-chain swaps and transferring $BTC to a counterparty to enable them to enter trades with the Foundation in large size & on short notice.”

The LGF said that it sold 26,281,671 USDT, 23,555,590 USDC for 50,200,071 UST. It added that some of the excess funds of 5,313 BTC was returned after  the foundation bought 1,515,689,462 UST.

Some Counter Claims

The update by the Terra team became necessary after the investors and market analysts started asking if the reserve in its possession were actually sold to balance the value of UST after it started dropping from $1. The team has always maintained that funds sent to Binance and Gemini were sold to stabilize the UST.

Blockchain analytics company, Elliptic, released a report showing that the funds were actually moved to the two exchanges after which it could no longer track them.

There have been calls to the Terra team to burn the excess LUNA in circulation and not depend on minting more of its cryptocurrency with the hope that the problem will go away. The Binance CEO made the call last Friday as the value of the token plummeted below the $1 in view of investor dissatisfaction on the performance of the Terra token.

CZ wrote in a Twitter post that “You cannot mint your way out of bankruptcy all the time”

Author: Jinka Kamma

Jinka Kamma is passionate about the prospects of blockchain and the freedom cryptocurrencies afford people across borders. He holds small amounts of bitcoin and tether.

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