Where is LFG accumulated $2b worth of Bitcoin reserve?


The cryptocurrency market has seen considerably worse days before. However, the present state of the market remains unprecedented. Terra’s LUNA and UST have tumbled, triggering a chain reaction in the rest of the market. One thing is certain: investors want answers – reasons for their lost investments – now more than ever.

Where is the Luna Foundation Guard’s (LFG) $2 billion worth of Bitcoin? Terra’s CEO established the Luna Foundation Guard (LFG) to help the Terra ecosystem develop. After the collapse of Terra, LFG has still not addressed a fundamental question regarding its Bitcoin reserves. The real question is: where is it? Why wasn’t this power used to prevent LUNA and UST from de-pegging? What is it currently being used for?

LFG Terra’s $2 billion Bitcoin reserve mystery 

According to CoinMarketCap, UST is currently valued at 0.21 USD, down 98% from its all-time high earlier in the year. According to market analysts, LFG’s operation has failed as it accumulated 70,736 bitcoins (over $2 billion) as “forex reserve” for Terra UST, an amount that stands in question. The stablecoin has recently been extremely depegged and wreaked havoc in the cryptocurrency market.

The UST is a decentralized algorithmic stablecoin that uses code to maintain its price at around $1, according to a delicate yet complex system of minting and burning. Developers designed a complex system to keep the dollar peg: some of the related cryptocurrency LUNA gets destroyed to create UST.

Unlike rival stablecoins Tether and USD Coin, UST isn’t backed by anything real-world, such as bonds. Instead, the Luna Foundation Guard (LFG), a non-profit headed by Do Kwon of Terra fame, safeguards roughly $3.5 billion in Bitcoin reserve.

On 5 May 2022, the LFG bought $1.5 billion in Bitcoin to supplement its most popular stablecoin, known as U.S. Terra. That move by the Luna Foundation Guard brought it closer to its objective of amassing $10 billion worth of Bitcoin to back the UST stablecoin.

The UST Forex Reserve has amassed about $3.5 billion in Bitcoin, putting it among the world’s top 10 bitcoin holders. It also possesses nearly $100 million in avalanche, another cryptocurrency.