Do Kwon only has 313 BTC, down from 80,000 after UST and LUNA crash

  • Luna Foundation Guard currently owns just 313 BTC after it cashed out its 80,000 BTC stash as it tried to save the collapsing UST stablecoin, failing in the end.
  • LFG says it’s working on using the remaining assets, which stand just above $90 million, to compensate the remaining users of UST.

Throughout last week, crypto circles were dominated by chatter on the collapse of UST and LUNA, with the latter now trading at $0.00018 as the not-so-stable coin now trades at $0.11 after crashing another 36 percent in the past day. Even with the new week, UST is still grabbing the headlines, this time for its reserve. As the Luna Foundation Guard revealed today, it only has 313 BTC in its possession, down from over 80,000 BTC a week ago.

Do Kwon, the Terra founder, had been all over the news after he made the bold claim that he wants to be the second-largest owner of BTC after Satoshi Nakamoto himself. His plan was to snap up $10 billion worth of the leading crypto as a reserve for his UST algorithmic stablecoin. Before it all went up in flames, he had managed to accumulate $3.5 billion through LFG.

Read More: Terra founder Do Kwon: I want to be the second biggest Bitcoin owner after Satoshi

Today, LFG revealed what had happened to its reserves.

On May 8 when the price of UST started dipping, LFG started converting its crypto stash to UST to reduce the supply of the stablecoin and in effect push its price up. The organization 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.”

By May 10, UST was still going down and Terraform Labs (TFL), the maker of LUNA and UST sold 33,000 BTC for an aggregate of 1.1 billion UST. Two days later, LFG swapped 883 million UST for LUNA and staked it at a range of validators to protect against a governance attack.

After all these, and other transactions, this is all that remains of the reserves:

LFG further revealed that it’s working on a plan to use its remaining funds to refund UST holders, starting with the smallest holders. This is in line with suggestions that have been put forward and even supported by crypto leaders including Vitalik Buterin.

The Foundation stated:

The Foundation is looking to use its remaining assets to compensate [the]remaining users of UST, [the]smallest holders first. We are still debating various distribution methods, updates to follow soon.

Previously, blockchain analytics firm Elliptic had outlined how LFG had transacted its crypto stash, following the funds over the blockchain. The firm found that LFG had used Gemini and Binance, although it was unable to prove that the crypto had been sold.

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