The Luna Foundation Guard, or LFG, a fund focused on the Terra ecosystem, has said it cannot provide a timeline to distribute assets to users following stablecoin TerraUSD depegging from the United States dollar. In an Oct. 7 Twitter thread, LFG cited “ongoing and threatened litigation” in its reasons for being unable to distribute its remaining assets to UST users, starting with the smallest hodlers. The fund’s reserves held more than $4 billion in assets prior to the market downturn in May, an amount that has dropped to roughly $105 million at the time of publication.
[Wright, T. Distribution of assets is ‘not possible at this time:’ Luna Foundation Guard. (Accessed October 9, 2022)].
"In the tweet, LFG reiterated its commitment to reimburse smaller investors using its remaining asset reserves." [Thomas, D. Luna Foundation Wants to Repay Small-Time UST Investors, but Why Can’t They?. (Accessed October 9, 2022)].
"According to figures self-reported from LFG, the foundation’s reserve’s currently total around $100 million. That’s a drop in the bucket of the estimated $60 billion in value wiped out by the collapse of the Terra ecosystem" [Nelson, D. and Kessler, S. LFG Slow-Walks Plan to Repay Small-Time Terra Holders, Citing Legal Threats. (Accessed October 9, 2022)].
Terra founder Do Kwon has recently made comments that contradict the LFG’s claims. On Thursday, he said that his assets have not been frozen after reports alleging that South Korean prosecutors have frozen ₩56.2 billion ($39.9 million) in cryptoassets belonging to Kwon started circulating. 'Once again, I don’t even use Kucoin and OkEx, have no time to trade, no funds have been frozen,” he said in response to a tweet by CoinDesk that claimed prosecutors in South Korea have frozen around $40 million of Kwon’s funds. “I don’t know whose funds they’ve frozen, but good for them, hope they use it for good.'
[L., Laura. Terra Luna Foundation Guard Halts $100M Compensation Distribution. (Accessed October 9, 22022).
"Crypto Twitter users responding to the announcement criticized the fund for not offering compensation in a speedy manner, and Terra co-founder Do Kwon for his alleged involvement in the collapse. 'If you guys wanted to do it, you would have already done it long time before litigations,' said user SvNem26. 'You had enough time but instead DK was blaming exchanges for not providing data.” [Wright, supra].
"FatManTerra called the excuse of continued litigation 'characteristically pathetic,' while another Twitter user SonicTheBer, lamented, 'This is just next [level] exit scam” [Thomas, supra].
"Fatman Terra, however, tweeted that the Foundation was only making excuses. According to him, there was a 43 days gap between when the stablecoin de-pegged and when the first lawsuit was filed against Terra. He stated that the Foundation “had loads of time to do a simple USDC airdrop” [Adejumo, O. Luna Foundation blames litigations for non-distribution of assets to Terra holders. (Accessed October 9, 2022)].
"FatMan also wrote sarcastically, 'Sorry, we can’t pay back the money we scammed you out of five months ago because you said you’ll sue us for the money we scammed you out of after not receiving any updates for five months. I’ve seen some bad excuses but this one takes the cake” [Qadir AK. Luna Foundation Guard (LFG) Claims No Fixed Timeline For Returning User Funds. (Accessed October 9, 2022)].
This is just another chapter in the saga which is 'Terra' and 'Do Kwon'.
A report by South Korean local media outlet News1 wrote on Wednesday that the LFG created a wallet holding some 3,313 BTC on the crypto exchange Binance one day after the arrest warrant for Kwon was issued. As per the report, some $27.6 million worth of BTC was then transferred from Binance to KuCoin and about 56.2 billion won to the OKX exchange in the following three days. Kwon has gone head to head with South Korean regulators and various authorities In late September, the Seoul Southern District Prosecutor’s Office’s Financial and Securities Crime Unit confirmed that Interpol had issued a Red Notice – a high-level request for global police officers to “locate and provisionally arrest” Kwon “pending extradition, surrender, or similar legal action,” as reported.
[L, Laura, supra].
"Kwon recently had his passport’s validity revoked by the South Korean Ministry of Foreign Affairs after authorities asked that he be added to Interpol’s so-called red list. Kwon faces a class-action lawsuit in South Korea for involvement in fraud following TerraUSD’s crash" [Thomas, supra]