A third-party audit report released by JS Held on November 16 revealed that the Luna Foundation Guard spent $2.8 billion after the UST divestment to get out of the debacle.
According to a third-party audit report released by JS Held on November 16, the Luna Foundation Guard spent $2.8 billion, after the UST divestment, to get out of the debacle. In particular, it has become clear that the reserves were not used to pay the investors in the project.
Furthermore, the report states that “TFL went out of its way and spent $613 million of its own capital to defend the UST peg… To defend the UST price peg, LFG, TFL and Jump initially bought UST and LUNA.”
Audit Reveals No Misappropriation of Funds
In early May, the algorithmic stablecoin Terra USD (UST) de-pegged from the dollar due to an imbalance. The imbalance is related to the burning and minting mechanism of the ecosystem. The report also said that the tweets LFG posted during the accident are accurate about the company’s reserve balances.
In response, LFG appears satisfied that allegations of embezzlement, misuse of funds, and money laundering by insiders have not been substantiated.
Did the Reviewer “Hand-select” the Records?
Crypto influencer FatMan has welcomed the step of publishing the audit report but has questioned the missing trading records. He claims that the auditor has “handpicked data rather than providing the whole story”.
He further argued that, “TFL sends Jump BTC, and Jump sends TFL UST… That’s it. There are no trade records for this leg! There are several issues here, as Jump was heavily involved in the Terra ecosystem and could have simply cleaned up his own book. Despite claiming full transparency, this part is omitted.”
Furthermore, FatMan seems confused with dumping 440 million UST and 700 million+ LUNA in the process. He points out that, “The second thing that seemed strange to me was: TFL was selling UST at the same time that it was buying UST”
FatMan argues that, “If peg were fairly defended, there would be a flow of buy orders at predictable intervals. The fact that the transfers were unevenly staggered, and that TFL was *selling* UST at the same time, raises questions. And these are just known accounts.
After the audit was released, co-founder Do Kwon stated that, “For those of you whose minds I have not been able to change, I accept your judgment.” He also apologizes for not better communicating the risks of the project, and implies that it will take more than rage and blanket bans on similar protocols to figure out how to stop future failures of this nature.
By Audy Castaneda
