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Third-Party Audit Report Reveals Luna Foundation Defended UST Peg

Cryptocurrency Nov 17, 2022 08:16
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© Reuters. Third-Party Audit Report Reveals Luna Foundation Defended UST Peg

  • JS Held releases Luna Foundation Guard and TerraForm Labs audit.
  • Report suggests LFG used $2.8 billion to defend UST’s peg in May.
  • TerraForm CEO Do Kwon says Terra crash should not be compared with FTX collapse.

According to a third-party Audit report, Luna Foundation Guard (LFG) and TerraForm Labs (TFL) spent about $3.4 billion seeking to shield the UST peg. The LFG oversees the UST algorithmic stablecoin and issued a technical audit in May to provide complete transparency of assets and re-peg efforts involving TerraUSD (UST). With the audit, LFG hopes to address all allegations.

As per the third-party audit by JS Held, a New York consulting firm, the LFG spent $2.8 billion (80,081 Bitcoin and $49.8 million in stablecoins) to protect UST’s peg, as LFG tweeted on May 16. The audit also reveals that Terraform Labs spent an additional $613 million of its funds protecting the peg of its algorithmic stablecoin.

Although LFG and TFL made some progress, the value of UST eventually reached zero, signaling the end of the $60 billion ecosystem. Numerous lenders, brokers, and exchanges exposed to the crypto ecosystem filed for bankruptcy protection as a result of the crash.

In May 2022, LFG and TFL hired JS Held to increase transparency in its peg defense effort. The research debunks the widely held belief that Do Kwon, co-founder of Terraform Labs, stole money from LFG after UST went bankrupt. The audit, moreover, shows that no LFG funds were stolen by the Terra team or blocked by authorities.

Contrary to popular belief, TFL’s controversial creator Do Kwon thinks Terra’s fall is nothing like “recent failures in crypto,” referring to the recent collapse of FTX. The exec, who was handed Interpol’s red notice, stated TFL and LFG did all in their power to avert that outcome, whereas centralized custodial systems misappropriated user cash.

In a tweet published hours after the Audit report was made public, Kwon tweeted:

“Terra was not a centralized platform gone bust through misuse of funds or fraud – it was one of the largest layer 1 blockchains, with two native assets in the CMC top 10. How to prevent other failures like it will take more than anger and sweeping bans of similar protocols.”

Soon after the audit report was released, Terra tokens, namely, LUNA, LUNC, and USTC all saw an uptick in volume.

The post Third-Party Audit Report Reveals Luna Foundation Defended UST Peg appeared first on Coin Edition.

Third-Party Audit Report Reveals Luna Foundation Defended UST Peg
 

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