Over $1.2B of Luna Foundation Guard's bitcoin reserves remains unaccounted for; LFG had $2B+ in bitcoin reserves and loaned $750M to OTC firms and market makers
Quick Take — Luna Foundation Guard accumulated over $2 billion in bitcoin reserves and provided a loan of $750 million in bitcoin.
The BlockYogita Khatri
Context & Ripple Effects
LFG had just expanded the bitcoin pool meant to bolster Terra through a $1.5B bitcoin purchase, making the subsequent uncertainty over where reserve assets went central to the credibility of that support mechanism.
The later disclosure that LFG's bitcoin balance had fallen from roughly 80,000 to about 300 put a concrete endpoint on the reserve drawdown, while leaving transaction-level accountability as the key issue raised by this report.
First-order effects
LFG faces immediate pressure to reconcile its bitcoin holdings, the $750M lent to OTC firms and market makers, and the assets available to UST users.
The OTC firms and market makers named as loan recipients become essential counterparties in explaining how reserve bitcoin was deployed during the defense of UST.
Second-order effects
UST users' prospective compensation depends on a verifiable asset accounting, since LFG later said remaining assets would be used for that purpose.
If reserve vehicles cannot independently reconcile holdings and interventions during a crisis, stablecoin backing will be judged on auditable deployment records rather than reported reserve totals.
The episode points to a broader crypto legitimacy gap: reserve managers that combine custody, lending, and market intervention will face stronger demands to separate and disclose those activities.
The trend: Crypto reserve programs are moving from public balance announcements toward scrutiny of whether assets can be independently traced through stress events.
4/ As a result, the LFG Council has voted to execute the following: - Loan $750M worth of BTC to OTC trading firms to help protect the UST peg. - Loan 750M UST to accumulate BTC as market conditions normalize.
@lfg_org
@lfg_org on x
Below is the new LFG $BTC wallet address: https://blockchain.com/... Last clip withdrawn by the LFG was ~37K BTC. Similar to the last deployment, it has been loaned to MMs. Very little of the recent clip has been spent but is currently being used to buy $UST. Updates coming.
@twobitidiot
@twobitidiot on x
Where is LFG's Bitcoin reserve?
@0xfr_
@0xfr_ on x
@BennettTomlin i want to see evidence they actually used all their reserves maybe they realized it was useless at some point and saved what they could
@freddieraynolds
@freddieraynolds on x
@Galois_Capital For Terra to have any future LFG and TFL need to open up their books tbh
@christine_dkim
Christine Kim on x
The Luna Foundation Guard has moved 37,179.99 BTC (~$1.2bn) of its reserves to OKEx. The funds were again loaned out to market makers in an ongoing attempt to re-stabilize the UST peg. UST prices continues to falls. H/t: @AppBreadcrumbs https://twitter.com/... https://twitter.com…
@adamscochran
Adam Cochran on x
@Darrenlautf 1/2 My hunch is, if their loaning statement was true then either: 1) MM blew up on levered position & is trying to claim they should keep the BTC or 2) They are in denial phase, think they can turn it around, and soon will realize they can't & liquidate it for operat…
@lawmaster
Larry Cermak on x
@Darrenlautf I am really fucking surprised they didn't publish anything about what they did with it yet. There are some unconfirmed rumors they still have significant BTC reserves left. 100s of thousands of people rekt and no one knows what they did with it
@nischalshetty
@nischalshetty on x
Hope funds are accounted for as it's part of foundation May be just a case of not having shared the specific wallet address But bigger question is: How did a foundation end up being used as an asset custodian for backing an algorithmic stablecoin 🤔 https://www.theblockcrypto.com/…
@iamdcinvestor
@iamdcinvestor on x
hey @stablekwon, interesting proposal on how to revive @terra_money but just one question: WHERE THE F IS THE $2B IN BTC from @LFG_org ? PRODUCE AUDITED RECORDS OF WHERE IT WENT, OTHERWISE GTFO AND GO TO JAIL YOU WORTHLESS GRIFTER have a nice day 😘 https://agora.terra.money/...
@pedroexplore1
Pedro on x
Did the $2-3B in BTC reserves run out? Are you waiting for UST supply to = remaining BTC reserve to the come announce “hey every UST is no fully collateralized!” I am mad at the silence.
@altcoinpsycho
@altcoinpsycho on x
1) This is essentially a self-loan to an otc firm 2) basically reads: sell $750m of BTC soon then buy back $1.5 billion worth when price is attractive Yea... we definitely going lower lol https://twitter.com/...
@bennetttomlin
Bennett Tomlin on x
I hope “Updates coming.” is the last thing that LFG ever tweets https://t.co/dGPTktr5Tc