Terra Labs and Luna Guard Order an Audit to Defend Themselves Against Claims of Misappropriating Funds

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Last Updated on November 18, 2022 by Bitfinsider

The Luna Foundation Guard (LFG) and Terraform Labs (TFL) commissioned a technical examination of their efforts between May 8 and 12 to protect the price of TerraUSD (UST), which has now been renamed TerraUSD Classic (USTC). According to the LFG blog, the purpose of the audit was to address “allegations made on social media” regarding the destiny of monies sent during efforts to defend the UST dollar peg.

According to the audit, LFG spent 80,081 Bitcoin and $49.8 million in stablecoins (about $2.8 billion at the time) to protect the US dollar’s peg. This was consistent with LFG’s tweets on May 16. Moreover, TFL spent $613 million defending the peg. The audit was undertaken by JS Held, an American consulting firm.

LFG found from the audit results that no monies were misappropriated and none were used to benefit insiders. In addition, LFG asserted that the audit refuted the notion that “LFG funds were blocked by law enforcement.” Rather, “All LFG money are stored in self-hosted wallets, have not been moved since the tweet on May 16, and are not frozen.”

The ultimate conclusion is not supported by the text and is intriguing in light of the fact that South Korean police asked exchanges to freeze LFG-related cash on May 23. In September, South Korean authorities once more requested that KuCoin and OKX freeze 3,313 BTC sent from a wallet registered on September 15 under the name LFG.

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