Terra (LUNA) founder Do Kwon and the Luna Foundation Guard (LFG) spent as much as 80,000 bitcoin, worth a whopping $2.8bn, to defend the algorithmic stablecoin UST’s dollar peg, a new audit report has revealed.
The newly revealed numbers were shared by Do Kwon himself in a Twitter thread on Wednesday, after Luna Foundation Guard – the entity tasked with maintaining the stability of UST – released a technical audit report by auditing firm JS Held.
According to the audit, just over 80,000 BTC, worth $2.8bn, was spent by LFG to defend the UST peg. Additionally, LFG spent $613.6 from its own capital on a “net purchase basis,” the audit report said.
The LFG team noted in its Twitter thread that LFG was “100% funded by donations from TFL to build exogenous reserves for Terra stablecoins,” while adding that the funds were “unfortunately insufficient” to defend the stablecoin’s peg.
“LFG lived up to its mandate fully to do everything within its resources to prevent that outcome,” the LFG team further said.
Meanwhile, the report also confirmed that LFG’s token balances, as reported in tweets from LFG on May 16, were accurate.
“The peg defense transactions recounted in the LFG May 16 Tweets included estimates instead of actual transaction data, but the use of these estimates did not affect the accuracy of the reported LFG balances,” the report said.
Do Kwon: “I am sorry”
Commenting on the situation as the new audit report was released, Terra founder Do Kwon said that he is sorry for the losses experienced by users.
“Many of you lost a lot of money in UST – for this I am sorry. While the system was transparent and open source, I as its creator should have understood and communicated its risks better,” Do Kwon commented in a tweet as the report was released.
He added in a follow-up tweet that although he was “wrong” about the risks of UST, there was “no fraud” involved.
“TerraForm Labs donated what was then >$3B to establish [Luna Foundation Guard] to diversify UST’s collateral backing, and focused our investments to grow Terra’s ecosystem. We wouldn’t have done this if we thought UST were to fail,” he said.
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