Terra Spends BTC in Panic, Still Fails to Normalize System

  • Luna Foundation Guard reveals details of its crypto reserves.
  • It spent a huge number of BTC in an effort to restore UST.
  • This left 313 BTC remaining on its crypto reserve.

Luna Foundation Guard (LFG) revealed that it had spent a large part of its 80,394 Bitcoin reserves on Monday. In a tweetstorm, LFG posted about the Terra (LUNA) and UST price drop. In detail, the foundation spent most of its BTC reserves in an attempt to restore UST’s peg, leaving behind only 313 BTC.

As of May 7, LFG had crypto reserves that included BTC, BNB, USDT, USDC, AVAX, UST, and LUNA. It had 80,394 BTCs worth nearly $3 billion at that time.

It had reserves of  39,914 BNB, 1.9 million AVAX, 26.2 million USDT, 23.5 million USDC, 697,344 UST, and 1.6 million LUNA. More importantly, when the UST price began to fall substantially below one dollar, LFG started converting its USDC and USDT reserves for an approximate number of 50,200,071 UST.

The foundation carried out the conversion process by directly executing on-chain swaps and transferring 52,189 BTC to a counterparty for 1,515,689,462 UST. This allows the counter team to enter trades with LFG in large sizes.

However, its actions failed to normalize the Terra system, and LFG transferred an additional 33,206 BTC for 1,164,018,521 UST. This left its BTC reserve to only 313 coins, worth $9.2 million (current price). Currently, LFG’s total crypto reserves hover at $81 million.

Moreover, LFG posted these moves as it was under pressure on Twitter for not being obvious about its crypto reserves during the Terra price crash.

Furthermore, as of now, Luna trades at $0.000178, with 24.6% down in the past 24 hours. UST is registered at $0.154, with a 6.11% dip in the past 24 hours.