FatManTerra responded to a tweet by the Luna Foundation Guard on October 7, 2022, where it updated its Twitter following on why it hasn’t yet reimbursed UST holders after the stablecoin crashed in May 2022.
What happened to LFG’s original plan?
In the tweet, LFG reiterated its commitment to reimburse smaller investors using its remaining asset reserves:
This tweet comes as the first update on the situation since a May Twitter thread, where LFG said that it was planning to use all its remaining funds to “compensate remaining users of UST, smallest holders first,” but has yet to do so, citing litigation woes:
The organization had used part of its reserve funds to help prop up the dollar peg of the UST stablecoin after it crashed in May 2022. At press time, the reserve composition consists of 313 BTC, 39,914 BNB, 1,973,554 AVAX, 1,847,079,725 UST, and 222,713,007 LUNC.
To add to the mix, South Korean prosecutors recently froze crypto assets allegedly belonging to LFG. LFG has vehemently denied the claims, saying it has not moved BTC or other tokens from its wallet since May 2022.
FatManTerra then asked LFG to provide evidence why it could not perform the promised distribution if its funds were not frozen:
At press time, LFG had yet to respond.
Following the crash of TerraUSD, many UST investors took to Reddit forums to vent their frustration, prompting one amateur investor PersianCapital to propose a solution to the redistribution of funds. For each small TerraUSD investor that deposited UST in Terraform Labs’ crypto bank Anchor, LFG could return $0.30 per UST. At the time, Ethereum co-founder Vitalik Buterin agreed with the proposal.
What is LFG?
The Luna Foundation Guard was launched in Jan. 2022 to help the Terra ecosystem grow as it sought to revolutionize what was then a predominantly centralized stablecoin marketplace. It counts Terraform Labs co-founder, and CEO Do Kwon, Nicholas Platias, a founding member of Terraform, Kanav Kariya, the president of Jump Crypto, Remi Tetot fo RealVision, Jonathan Caras from Levana Protocol, Jose Maria Delgado of Delphi Digital.
Kwon recently had his passport’s validity revoked by the South Korean Ministry of Foreign Affairs after authorities asked that he be added to Interpol’s so-called red list. Kwon faces a class-action lawsuit in South Korea for involvement in fraud following TerraUSD’s crash.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.