According to Luna foundation Guard (LFG), a fund that focuses on Terra, it cannot provide a timeline for distribution of assets to users and HODLers following stablecoin Terra UST crash in May of 2022.
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.”
Crypto Twitter users responding to the announcement criticized the fund for not offering compensation in a speedy manner, and Terra co-founder Do Kwon for his alleged involvement in the collapse.
Fatman Terra tweeted that the Foundation was only making excuses. According to him, there was a 43 days gap between when the stablecoin de-pegged and when the first lawsuit was filed against Terra. He stated that the Foundation “had loads of time to do a simple USDC airdrop.”
“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.”
Luna Foundation had spent almost all its Bitcoin (BTC) reserve to defend UST’s peg. According to the Foundation’s dashboard, its reserve is left with $105 million, with its Bitcoin reserve worth $6.13 million.
Meanwhile, a member of the 5-man council Jonathan Caras, in May, said Do Kwon did not reach out to the council since UST’s crash.
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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 Do Kwon to surrender his passport by Oct. 20 or risk having the document voided and not reissued.
The South Korean government has given Kwon 14 days to comply with the new order, it said in a notice on the website Thursday. The order follows Interpol issuing a red notice against the crypto entrepreneur last month, requesting law enforcement agencies worldwide to locate and arrest him.