Luna Foundation Guard postpones compensation efforts, cites 'ongoing and threatened litigation'

Quick Take

  • The Luna Foundation Guard (LFG) cited mounting legal pressure and threats as a reason to forestall repayment efforts.

  • LFG stated there is no current timeline to establish payments until said legal issues are mitigated.

Since the collapse of the TerraUSD, the algorithmic stablecoin that catastrophically lost parity with the U.S. dollar earlier this year, the Luna Foundation Guard (LFG) maintained it would follow through with efforts to compensate users with losses.

However, it would appear the wait for compensation may yet drag out as LFG cited “ongoing and threatened litigation” as reasons to postpone distributions to users with losses. The group added that there is no current established timeline to resolve the issue while the legal issues remain outstanding, according to a Twitter thread on the subject.

Once a reserve that held upwards of $60 billion in assets, in the wake of TerraUSD's fall, the LFG’s total reserve balance stands at just over $105 million, according to records

The news comes amid the continuing investigation into Terraform Labs, the company that oversaw the development of the Terra network. Authorities in South Korea arrested the company’s head of general business operations, though a judge later threw out that arrest warrant. Terraform Labs founder Do Kwon was recently ordered to surrender his passport by South Korea's Ministry of Foreign Affairs.


© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.