Terra’s Luna Foundation Guard Dumps $750M Worth of Bitcoin
The LFG attempted to downplay this dumping by calling it a “loan” to OTC trading firms.
Terra’s founder stated that the sold assets would eventually be repurchased.
LUNA, affected by the broader market bearish cues, has declined by 12% in 24 hours.
Terra’s growing presence in the public eye has subjected it to be more transparent with its investors. However, the most recent decision made by its non-profit organization has ticked off a bunch of UST and LUNA holders.
LFG sells treasury’s Bitcoin
A couple of hours ago, Terra’s Luna Foundation Guard (LFG) announced that due to the uncertain macro conditions across the market have pushed the foundation into selling about $750 million worth of Bitcoin (BTC) from its treasury.
They described this action by labeling it as a “loan” to OTC trading firms in order to protect the UST peg and said that they would eventually “loan” another 750 million UST to buy back the sold Bitcoin when market conditions normalize.
Further explaining this move, the LFG tweeted:
“Relative to Terra, $UST has experienced notable directional flow over the weekend, accompanied by similar volatility in both $LUNA and $BTC. While this flow has currently evened out, it is prudent to prepare for potential future volatility. Per the LFG’s mandate, the LFG will proactively defend the stability of the $UST peg & broader Terra economy, especially under volatility and the uncertainty of macro conditions in legacy markets.”
When a user demanded clarifications on how much BTC was sold and more details on the extent of defending the UST peg, Terra’s founder, Do Kwon, replied.
He said that should a UST imbalance occur, the present Bitcoin will be used to rebalance, and if the demand is surplus again, BTC will be bought back.
The total reserve balance in the LFG treasury has since declined to $2.89 billion after peaking at $3.9 billion a few days ago.
LUNA continues its downtrend
While Terra and LFG struggle with the UST, the blockchain’s native toke LUNA is itself struggling. Trading at $60.45, at press time, LUNA has plummeted by 12.12% in the last 24 hours after having already slipped from $82 four days ago.
The crypto market’s bearishness is clearly visible on the charts, and it is dragging down every cryptocurrency in the market. A recovery for LUNA will only be possible when the broader market recovers and not by external factors.
This article was originally posted on FX Empire
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