The Luna Foundation Guard, or LFG, a fund focused on the Terra ecosystem, has said it cannot provide a timeline to distribute assets to users following stablecoin TerraUSD depegging from the United States dollar.
In an Oct. 7 Twitter thread, LFG cited “ongoing and threatened litigation” in its reasons for being unable to distribute its remaining assets to UST users, starting with the smallest hodlers. The fund’s reserves held more than $4 billion in assets prior to the market downturn in May, an amount that has dropped to roughly $105 million at the time of publication.
“Distribution is not possible at this time,” said the fund. “While these matters are outstanding, there can be no timeline established for resolution [...] We will not stop advocating for our ability to follow through on these initial plans, and those waiting will be the first to know of new developments.”
1/ Since $UST’s depeg in May, there has been understandable interest in LFG’s assets and how they will be distributed. As mentioned, our goal is to distribute LFG’s remaining assets to those impacted by the depeg, smallest holders first. https://t.co/VOTQDkQZ90— LFG | Luna Foundation Guard (@LFG_org) October 7, 2022
Crypto Twitter users responding to the announcement acriticized the fund for not offering compensation in a speedy manner, and Terra co-founder Do Kwon for his alleged involvement in the collapse.
“If you guys wanted to do it, you would have already done it long time before litigations,” said user SvNem26. “You had enough time but instead DK was blaming exchanges for not providing data.”
Authorities in South Korea have been pursuing a case against Kwon and Terra associates following the collapse of the ecosystem. In September, a South Korean court issued an arrest warrant for Kwon, followed by Interpol adding his name to its Red Notice list. At the time of publication, Kwon’s whereabouts were unknown, but he said on Twitter he was “making zero effort to hide.”
On Oct. 5, prosecutors issued an arrest warrant for Terraform Labs’s business head Yoo Mo, leading to his arrest in South Korea before a judge reportedly dismissed the legal action. South Korea’s Ministry of Foreign Affairs also ordered Kwon to surrender his passport by Oct. 20 or risk having the document voided and not reissued.