The disclosure that only 313 bitcoin remain turns the reserve from a stabilizing backstop into a limited recovery pool. A later independent accounting of the defense effort put LFG's May crypto spending at $2.8B, reinforcing why the disposition of assets matters to affected users.
First-order effects
UST users become the stated beneficiaries of LFG's remaining assets, while the bitcoin reserve available to support the system is effectively exhausted.
LFG must shift from defending UST's peg to administering compensation from its remaining UST and LUNA tokens.
Second-order effects
The earlier questions over missing reserve assets become questions of recovery allocation: UST users need clarity on what remains and how LFG will distribute it.
Terraform-linked reserve strategies lose credibility as a substitute for a stablecoin's own stability once the backstop is spent without preventing the collapse.
Third-order effects
The episode points toward stablecoin reserve arrangements being judged not only by their reported size, but by auditable disclosure of custody, deployment, and recovery rules during stress.
The trend: UST's collapse is a data point in the shift from reserve accumulation as a confidence signal toward verifiable reserve governance and explicit holder-recovery mechanisms.
8/ As of now, the Foundation's remaining reserves consist of the following assets: · 313 $BTC · 39,914 $BNB · 1,973,554 $AVAX · 1,847,079,725 $UST · 222,713,007 $LUNA (of which 221,021,746 is currently staked with validators)
2/ Binance received 15,000,000 LUNA (at peak worth $1.6 billion USD, now not much) as part of the original ($3m) invest. 560x return at peak. It still sits on the address we received at 👇. Never moved or sold. Address: https://t.co/6HwTu6CCuB
The Terra blockchain has resumed block production. Validators have decided to disable on-chain swaps, and IBC channels are now closed. Users are encouraged to bridge off-chain assets, such as bETH, to their native chains. Note: Wormhole bridge is currently unavailable.
1/ I've spent the last few days on the phone calling Terra community members - builders, community members, employees, friends and family, that have been devastated by UST depegging. I am heartbroken about the pain my invention has brought on all of you.
Over *four years* ago I was a research analyst at @scalarcapital. The Terra / $LUNA deal came across our desk and I was assigned to it because I was the DeFi guy. Here's what I had to say about the project. How did we allow it to end up like this? https://twitter.com/...
The second way is to prioritize smaller wallets. People who had a couple thousand or more of UST deposited in Anchor. If Terra just focussed on the “poorest” 99.6% of wallets, then they could make this gigantic group 100% whole. Yes, you read that right! 4/
Strongly support this. Coordinated sympathy and relief for the average UST smallholder who got told something dumb about “20% interest rates on the US dollar” by an influencer, personal responsibility and SFYL for the wealthy. https://twitter.com/...
In summary, LFG has gone from having $3.1 billion in their reserves a week ago to now having roughly $87M. Which means they spent roughly $3 billion defending the UST peg and UST still collapsed. https://twitter.com/... https://twitter.com/...
@cz_binance Apparently 52k $btc was sent to Gemini and the rest (28k btc) was sent to Binance at 1am in a single transaction. https://www.elliptic.co/... https://twitter.com/...
After the Terra stablecoin had breached its peg to 60 cents, the market stabilization fund let insiders cash out to Bitcoin near par. I am shocked, shocked. https://twitter.com/...
4/ We are currently working on documenting the use of the LFG BTC reserves during the depegging event. Please be patient with us as our teams are juggling multiple tasks at the same time.
We probably do have some from trading fees. Probably valued close to 0 now. (Think of it as free trading in the past, haha). This just wasn't on my mind. Not how we prioritize things. Users first. 🙏
1/ Statement analysis is one of those “soft skills” that is important in life. It served me well as an FBI Agent, and continues to inform how I make decisions. Some friends highlighted a thread recently which made my antenna go up. BLUF: I'm not accusing anyone of a crime, but...…
1/5. Some interesting updates, full transparency and lead to protect users: As it turns out, most UST pairs were 0 fee to begin with. (I didn't know that, our team had to tell me.) So, not much UST there. We do have... https://twitter.com/...
4/ Now the important part. To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails users first, Binance last, if ever. Binance (after a 5 min discussion) fully support this proposal. 👇 https://twitter.com/...
Crypto coders don't get finance, partly from ignorance, partly from defects in reasoning that makes them blind to reality. The FDIC is precisely there to protect cash depositors in firms it SUPERVISES to make sure there is no TERRA-LUNA scam. https://fortune.com/...
This last bit is hilarious: They describe a process where they bailed out a few big insiders with the entire reserve, and now that there are just some stems and seeds left NOW they care about their victims? I so hope that the DOJ goes after these clowns with a vengeance. https://…
4/ LFG: · Directly sold 26,281,671 $USDT & 23,555,590 $USDC for an aggregate 50,200,071 $UST · Transferred 52,189 $BTC to trade with a counterparty, net of an excess of 5,313 $BTC that they have returned, for an aggregate 1,515,689,462 $UST