TerraUSD Backer Spent Reserves Trying To Salvage Dollar Peg; Regulators Eye Crypto
Backer of stricken TerraUSD says spent reserves trying to salvage dollar peg
An affiliate of the company behind collapsed stablecoin TerraUSD on Monday said it had spent the bulk of its reserves trying to defend its dollar peg last week and would use what little remained to compensate some users who had lost out.
The token's crash last week sent cryptocurrencies tumbling, a slide that resumed on Monday, as bitcoin gave up the gains it had eked out over the weekend to trade just below $30,000.
Cryptocurrency markets were rocked by the spectacular collapse of TerraUSD, a so-called stablecoin which lost its 1:1 dollar peg. TerraUSD was trading around 5 cents at 1647 GMT on Monday, according to CoinGecko pricing.
Luna Foundation Guard (LFG), a Singapore-based non-profit organisation designed to maintain TerraUSD's price, had been building large reserves of cryptocurrencies - including over 80,000 bitcoin - to support the peg. The value of the reserves hit $4 billion on May 3, according to LFG data.
But LFG said in a series of tweets https://twitter.com/LFG_org/status/1526126719874109440? on Monday that it had spent the majority of its bitcoin last week in a failed attempt to prop up TerraUSD as it collapsed.
Now, LFG said, it would use what little reserves it had left to compensate remaining users of TerraUSD, starting with the smallest holders, though it had yet to decide the best method of doing so.
But the remaining coins in the reserve were worth just under $90 million on Monday, according to LFG's data.
Holders of the TerraUSD coin and a linked token, luna, collectively lost around $42 billion in the last week, according to blockchain analytics firm Elliptic.
"There seems to be little hope for those hoping that some of the
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