Do Kwon Reacts as Terra’s LFG Issues its Audit Report

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In an attempt to offer complete openness on its resources and initiatives to return the peg TerraUSD (UST) to the US Dollar in May 2022, the nonprofit Luna Foundation Guard (LFG), which manages TerraUSD (UST), has published a technical audit. 

LFG seeks to refute all claims, such as those involving insiders, diverted money, money held in other wallets, and blocked funds. According to the research, LFG and TFL spent close to $3.4 billion protecting the parity of TerraUSD (UST).

On November 16, the Luna Foundation Guard revealed a technical audit report from independent auditing company JS Held in a tweet. The audit report states that LFG invested close to $2.8 billion through May 8 and May 12 to support the parity TerraUSD (UST). This contains 49.8 million stablecoins and 80,081 Bitcoin (BTC).

To safeguard the peg, Terraform Labs also shelled out an extra $613 million. According to the report, LFG used all available cash to keep UST’s peg intact, leaving just the leftover balances. The second-biggest holder of Bitcoin (BTC), LFG, intended to expand its Bitcoin (BTC) holdings to $10 billion. However, during high market volatility, approximately $2.5 billion abruptly dropped and were unable to support the TerraUSD (UST) parity. It affected the lives of cryptocurrency investors considerably seeing as the losses mounted $60 billion.

The Luna Foundation Guard likewise seeks to refute any accusations leveled against them. No LFG funds, it claims, were misused, utilized to the advantage of insiders, or kept in any other hidden accounts. Additionally, since May 16 all LFG have been held in self-custodial wallets and have not been relocated.

Do Kwon, the founder of Terra, asserts that the Terra scenario is distinct from prior crypto disasters. He also brought up FTX’s debacle, in which its operators misappropriated consumer assets for personal benefit.

“While there have been multiple recent failures in crypto, it is important to distinguish between Terra’s case, where a transparent, open-source decentralized stablecoin failed to maintain peg parity and its creators spent proprietary capital to try to defend it,” said Do Kwon.

Several people think that given their size, LFG and TFL require an audit by one of the Big 4 accounting firms. Do Kwon retorted that the size is not that large anymore.

The price of Terra (LUNA) is currently $1.66, decreased by more than 1% in the previous day. However, USTC (3%) and Terra Classic (LUNC) (1%) both increased.  Terra Classic (LUNC) is hovering around $0.00017 at the time of writing.

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