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Gungun Bhatia
Nov 16, 2022
by Gungun Bhatia

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

LFG UST Peg

Table of contents

  1. LFG And TFL Activities
According to a third-party investigation by JS Held, a Jericho, New York-based consultancy company, Luna Foundation Guard (LFG), the organization responsible for the defunct Terra ecosystem, expended $2.8 billion in cryptocurrency in May trying to protect the algorithmic stablecoin TerraUSD (UST) peg.

The audit further claims that Terraform Labs (TFL), the company behind the Terra blockchain, spent $613 million in an effort to uphold the peg.

LFG And TFL Activities

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 cryptocurrency sector, with multiple lenders, brokers, and exchanges declaring bankruptcy.

Terraform Labs founder Do Kwon stated that despite multiple recent crypto failures, it is crucial to differentiate Terra's case, where a transparent, open-source decentralized 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.

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stablecoin Terra ecosystem terrausd (UST) Luna Foundation Guard (LFG) Terraform Labs (TFL) everything ftx 15b ust coinmarketcap lfg treasury
LFG Spends $2.8B Protecting UST Peg, Third-Party Investigation Finds
Gungun Bhatia
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.

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