According to a third-party investigation by JS Held, a Jericho, New York-based consultancy company, <a href="https://www.cryptoknowmics.com/news/luna-foundation-guard-lfg-delays-compensation-attempts">Luna Foundation Guard (LFG)</a>, the organization responsible for the defunct Terra ecosystem, <a href="https://medium.com/terra-money/lfg-technical-audit-report-ddaf3f51e7d" target="_blank" rel="nofollow noopener">expended</a> $2.8 billion in cryptocurrency in May trying to protect the algorithmic stablecoin <a href="https://www.cryptoknowmics.com/news/sec-commissioner-says-crypto-regulations-likely-to-happen-faster-after-terrausd-ust-collapse">TerraUSD</a> (UST) peg.

https://twitter.com/LFG_org/status/1592821980772061184

The audit further claims that <a href="https://www.cryptoknowmics.com/news/south-korea-seeks-the-arrest-of-terraform-labs-founder-do-kwon">Terraform Labs (TFL)</a>, the company behind the Terra blockchain, spent $613 million in an effort to uphold the peg.
<h2>LFG And TFL Activities</h2>
The $60 billion ecosystem was destroyed consequently by the activities of LFG and TFL, with UST's value dropping to zero. Due to ecosystem exposure, the crash caused significant contagion throughout the <a href="https://www.cryptoknowmics.com/news/cryptocurrency-regulations-in-asia-a-run-through-of-the-basics">cryptocurrency</a> sector, with multiple lenders, brokers, and exchanges declaring bankruptcy.

Terraform Labs founder <a href="https://www.cryptoknowmics.com/news/bitcoin-reserve-linked-to-fugitive-do-kwon-opposes-moving-tokens">Do Kwon</a> stated that despite multiple recent crypto failures, it is crucial to differentiate Terra's case, where a transparent, open-source <a href="https://www.cryptoknowmics.com/news/former-meta-and-pinterest-executive-joins-sequoia-backed-decentralized-social-as-coo">decentralized</a> stablecoin failed to maintain peg parity. Its creators spent proprietary capital attempting to defend it from the failure of centralized custodial platforms whose operators mismanaged other customer funds for financial gain.

LFG Spends $2.8B Protecting UST Peg, Third-Party Investigation Finds

Luna Foundation Guard (LFG) expended $2.8 billion in cryptocurrency in May trying to protect the peg of algorithmic stablecoin TerraUSD (UST).

Gungun is an enthusiastic writer that likes to create content for various aspects of the blockchain and crypto industry. She carries out extensive research and provides readers with informative and high-quality material.

LFG Spends $2.8B Protecting UST Peg, Third-Party Investigation Finds

Top Picks