Luna Foundation Guard Transfers Digital Asset Holdings to Direct Custody Solution

The Terraform Labs-driven non-profit organization, Luna Foundation Guard (LFG), recently made headlines by moving its digital asset holdings to a direct custody solution.

This decision comes after a substantial settlement with the U.S. SEC, where Terraform Lab and its founder, Do Kwon, agreed to pay $4.5 billion in penalties for fraud-related charges.

Luna Foundation Guard Crypto Holdings Shifted to Custody

The LFG announced on the X platform that it had relocated its crypto assets, including Bitcoin, to a direct custody arrangement. This announcement follows the May 28 post that revealed its intention to make the transaction.

The organization claims the transition will enhance the security of funds. The transferred assets include a variety of cryptocurrencies such as Binance Coin (BNB), Avalanche (AVAX), Terra (LUNA), Bitcoin (BTC), and TerraUSD (UST), now referred to as USTC.

However, the restructuring process has raised concerns among crypto investors about the safety and management of funds. Moreover, Terraform Labs, currently under Bankruptcy protection, is winding down its business amid the substantial settlement with the SEC.

On-chain data revealed that LFG moved 1.974 million AVAX valued at around $71.19 million and 39,499 BNB worth about $23.5 million, totaling a substantial $94.7 million in transferred assets.

To ensure transparency and provide continuous updates to stakeholders, LFG has introduced the LFG Reserves Dashboard. This tool offers real-time information on the balance of funds held in LFG-associated wallet addresses.

According to the latest data, the total reserve balance is $124.36 million. This figure includes $49.71 million in Avalanche, $19.13 million in Bitcoin, and $32.87 million in Binance Coin (BNB).

In addition, Terraform Labs' CEO, Chris Amani, has confirmed that the organization is burning LUNA tokens in wallets linked to both Terraform Labs and LFG. This action is part of a broader strategy to manage the circulating supply of the crypto asset.

Following the SEC settlement, the CEO revealed that Terraform products will continue running while the company proceeds with its wind down. The Terra Luna Classic community also participates by burning LUNC and USTC tokens held in their wallets.

Crypto Projects Sales

After the recent settlement with the U.S. SEC, Terraform Labs is selling several of its major crypto projects. This move is part of TFL's efforts to wind down its operations while ensuring its existing products continue to function.

Among the projects TFL has put up for sale are Station Wallet, Pulsar Finance, and Enterprise Protocol.

Station Wallet is a secure platform designed for managing and storing various digital assets, while Pulsar Finance is known for offering advanced financial tools and analytics for cryptocurrency investments.

On the other hand, Enterprise Protocol supports enterprise-level blockchain solutions. These projects have been integral to TFL's operations, but they are now on the market as part of the company's restructuring.

The announcement of these sales has sparked uncertainty in the market. Investors fear a potential selloff of TFL's assets and the overall negative sentiment in the market.

This anxiety has led to significant drops in the prices of several key virtual currencies. Specifically, Avalanche has seen a 34% decline in price over the past month, while Terra has dropped by over 30%. TerraUSD has also decreased by more than 20%.

These price drops signal the fragility of the crypto market and its sensitivity to major shifts within influential organizations like TFL.

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