Terra Foundation LFG: Temporarily unable to compensate users affected by UST decoupling due to lawsuit issues

Oct 08,2022
KingData News: Terra Foundation Luna Foundation Guard (LFG) tweeted that it is currently unable to distribute the remaining LFG funds to users affected by the UST decoupling due to ongoing and threatened litigation. The organization stated, "Unfortunately, due to ongoing and threatened litigation, distribution is not possible at this time. While these matters are outstanding, there can be no timeline established for resolution. Our goal remains to distribute LFG’s remaining assets to small UST holders." According to data from the report released by LFG, the Foundation currently has reserves totaling approximately $100 million, having previously committed to compensate holders with the smallest positions on a priority basis.
This indicator provides follow-up on the depg of Terra's stablecoin UST on May 8th. Terra's stablecoin UST briefly lost its peg to the U.S. dollar on May 8th, dipping as low as $0.985. The depeg event came after a series of multi-million dollar UST selloffs as one account traded about $85 million worth of UST for USDC on Curve Finance, while another user reportedly sold $108 million worth on Binance. UST posted a slight recovery shortly after Terraform Labs CEO Do Kwon posted a tweet calling out the stablecoin's critics.