Audit reveals Luna Foundation Guard spent $2.8B to defend UST peg in May


A Nov. 9 technical audit report submitted by JS Held revealed the Luna Basis Guard spent $2.8 billion to defend UST’s peg between Might 8 and Might 12.

In response to the report, Terraform Labs additionally spent $613 million of its capital to defend the UST peg.

JS Held wrote that LFG’s Might 16 tweets about its protection operation have been correct aside from sure tweets primarily based on estimates — the auditor stated the estimates didn’t have an effect on the calculation of the ending balances.

In response to the Basis’s dashboard, its reserve is left with $83.93 million, with its Bitcoin reserve value $5.24 million.

The monetary auditor concluded that:

“UST was buying and selling at such a low value that UST holders have been making an attempt to arbitrage by swapping 1 UST for $1 value of LUNA. As UST was burned, extra LUNA was minted by the protocol in response. For the reason that value of LUNA was additionally declining, the entire UST holders making an attempt to swap UST for LUNA created a big sudden enhance in LUNA’s provide. This enhance, together with different market elements, brought on LUNA’s value to additional decline.”

Luna Basis says audit disproves rumors

Talking on the revelation, Luna Basis stated the audit dispels rumors that there was embezzlement of funds or that the funds have been used to revenue insiders.

In response to the Basis, all peg protection actions occurred within the open markets, with no particular choice for any social gathering.

The Basis additionally wrote that its funds weren’t frozen. It added that they’re saved in self-hosted wallets that haven’t been moved since Might 16.

The embattled founding father of the failed stablecoin, Do Kwon, stated:

“Whereas there have been a number of latest failures in crypto, you will need to distinguish between Terra’s case, the place a clear, open-source decentralized stablecoin failed to take care of peg parity and its creators spent proprietary capital to attempt to defend it, and failure of centralized custodial platforms the place its operators misused different individuals’s cash (buyer funds) for monetary acquire.

Do Kwon, alongside Luna Basis and Terraform Labs, is at present faced with regulatory scrutiny throughout a number of jurisdictions. Kwon’s location is unknown, and he’s on Interpol’s Red Notice.

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