It is reported that although LFG has this BTC asset to save UST, things have become quite tricky due to the collapse of the cryptocurrency environment.
As a stablecoin, UST should have always maintained a 1:1 peg with the US dollar. However, after a thousand miles, its latest currency value has been lying around $0.12.
During this period, LFG provided over-the-counter trading companies and market makers with $750 million in BTC “borrowings”, but unfortunately, the desire to maintain the stability of UST’s currency value ultimately failed.
However, someone pointedly pointed out that after this round of turmoil, LFG should have more than $1.2 billion in BTC reserves.
Curiously, the Luna Foundation was slow to disclose any details about the funds until the address of the wallets whose balances had been cleared was given in a tweet on Tuesday.
The Block pointed out: It is unclear where LFG sent all this reserves, as the BTC blockchain does not mark private wallets on-chain.
Former research analyst and now independent cryptocurrency researcher Mika Honkasalo mentioned:
The problem is that LFG did not clearly disclose how the funds were spent. Since the $750 million worth of it has been lent to market makers, how did the rest get transferred out of the wallet?
There’s no indication of how they actually operate, but that should be an easy question to resolve.
Last week, LFG said on Twitter that it had accumulated 80,394 BTC in its reserve account. But according to The Block Research, the wallet addresses containing the additional 9,658 BTC have not been made public, and LFG has not stated their whereabouts.
In addition, LFG did not disclose details of the publicly announced $750 million in borrowings, such as who the recipients were, at what interest rates, and the status of the underlying assets.
Honkasalo speculates that LFG may have dumped all of its BTC reserves in support of the USD-pegged UST algorithmic stablecoin. Or some of them remain reserved for other uses that have not yet been decided or announced.
Earlier reports said that LFG was seeking more than $1 billion in financing to keep the TerraUSD project alive. Those efforts appear to have died down, however, as the foundation has yet to make any announcements in this regard.
In the end, although The Block sent LFG an invitation for an interview, its representative argued that it was inundated with “a large number of requests” and recommended following the official Twitter account for the latest news.