TerraUSD backer, Luna Foundation Guard, says it will compensate some users of UST stablecoin
Last week was probably the worst week for Teraa LUNA as the cryptocurrency crashed to $0. Its stablecoin TerraUSD (UST) also fell from the $1 peg as the founder Do Kwon feared for his life and went into hiding. The collapse sent shockwaves to the crypto market causing bitcoin to plunge to as low as $24,000.
Today, Luna Foundation Guard (LFG), a Singapore-based non-profit designed to defend TerraUSD, now says it plans to compensate some users. But the company did not elaborate on the distribution method.
LFG confirmed in a post on Monday morning that it had sold over 80,000 BTC over the past week to acquire TerraUSD (UST) in an attempt to defend its crumbling U.S. dollar peg. LFG said it had spent the bulk of its reserves trying to defend the UST dollar peg last week.
In a Twitter thread, Luna Foundation Guard said, “Consistent with its non-profit mission & focus on the health of the Terra ecosystem, beginning on May 8, when the price of $UST began to drop substantially below one dollar, the Foundation began converting this reserve to $UST.” The company added that it would use the remainder of the reserve to try to compensate some users who had lost out.
“The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first. We are still debating through various distribution methods,” updates to follow soon, LFG said in a series of tweets.
10/ The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first.
We are still debating through various distribution methods, updates to follow soon.
— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022
Terra’s LUNA is a stablecoin designed to support UST’s one-to-one peg with the U.S. dollar. But in just one week, Terra’s LUNA has dropped 99.7%. LUNA tokens also lost 96% in the past 24 hours alone, pushing it to less than 10 cents. That’s down from about $60 earlier this week and a record $120 in mid-April.
Terra is currently ranked among the top 10 most valuable cryptocurrencies, dropped from its $120 peak last month to below $1 on Wednesday.
According to a report from CryptoSlate, LFG founder, Do Kwon, is hiding from the public eyes after an unknown person knocked on his front door asking for him. Kwon quickly fled the scene and local police have now opened an investigation. Another post on Twitter confirmed the report saying that Kwon’s spouse has now requested police protection.