Auditors confirmed the use of the LFG fund for $ 2.8 billion to save UST

Auditors confirmed the use of the LFG fund for $ 2.8 billion to save UST

The technical audit of actions by Luna Foundation Guard (LFG) conducted by the JS HELD showed that the organization spent a reserve fund of about $ 2.8 billion exclusively to protect the binding of algorithmic stablecoin Terrausd (UST).

According to the statement, the audit was designed to respond to a number of accusations from the community against LFG and Terraform Labs (TFL). The claims made included possible thefts of the reserve fund funds, its misuse and freezing of assets.

JS HELD experts gained access to primary information, their reward did not depend on the positive result of the audit, emphasized in LFG.

According to the results of the audit, specialists came to the following conclusions:

  • LFG spent 80 081 BTC and $ 49.8 million in stabilcoins (~ $ 2.8 billion) to protect the UST binding, which corresponds to messages from May 16;
  • In turn, TFL directed $ 613 million of equity to the salvation of a “stable coin”.

Despite the complete devastation of the reserve fund, funds were not enough to stabilize UST, the statement said. LFG noted that “completely fulfilled their obligations”.

The founder of TFL to Kwon called not to compare the collapse of the Terra ecosystem with recent incidents in the industry like Celsius or FTX:

“It is important to distinguish between the Terra case, when a transparent decentralized stabilcoin with open source could not maintain a binding to the dollar, and its creators spent their own capital on salvation, and the failure of the centralized casteral platform, the Billionaire Bill operators of which unlawfully used customer funds to obtain financial benefits”.

Recall that in March, Kwon said that for sustainable UST support, it is necessary to collect a reserve fund with a volume of $ 10 billion.

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