Luna Foundation Guard Unable to Provide Timeline for Asset Distribution Following UST Depeg

Ongoing Challenges for LFG

The Luna Foundation Guard (LFG), the fund dedicated to supporting the Terra ecosystem, has announced that it cannot establish a timeline for distributing its remaining assets to TerraUSD (UST) users after the stablecoin’s significant depegging from the U.S. dollar in May 2022.

In a Twitter thread dated Oct. 7, LFG cited “ongoing and threatened litigation” as a primary reason for the uncertainty regarding asset distribution. The foundation initially held over $4 billion in assets prior to the market downturn; however, that amount has since dwindled to approximately $105 million.

Commitment to Users

Despite these challenges, LFG reaffirmed its dedication to facilitating the eventual distribution of its assets, stating, “Distribution is not possible at this time. While these matters are outstanding, there can be no timeline established for resolution.” The organization pledged to keep its users informed of any new developments, emphasizing that those most affected would be prioritized in the asset distribution process.

Community Response

The community response on Twitter was sharply critical, with many users expressing frustration at the lack of timely compensation. Critics specifically pointed fingers at Terra co-founder Do Kwon and his alleged role in the collapse of the ecosystem. One user remarked, “If you guys wanted to do it, you would have already done it long time before litigations. You had enough time but instead DK was blaming exchanges for not providing data.”

Legal Actions Against Kwon

As the situation unfolds, South Korean authorities are actively pursuing legal actions against Kwon and other associates following the downtrend of the Terra ecosystem. In September, a South Korean court issued an arrest warrant for Kwon, which led Interpol to place him on its Red Notice list. Despite this, Kwon indicated on Twitter that he was “making zero effort to hide.” Furthermore, an arrest warrant was recently issued against Yoo Mo, business head at Terraform Labs, leading to his arrest, although legal action against him was purportedly dismissed by a judge.