According to breaking news, Avalanche Foundation has bought back $52 million worth of AVAX tokens from Do Kwon’s bankrupt ‘Luna Foundation Guard’.
The Avalanche Foundation has announced that it has completed the buyback of $52 million worth of AVAX tokens from the defunct Luna Foundation Guard (LFG), ending its relationship with the defunct Terra (LUNA) blockchain.
The buyback follows the dissolution of LFG, which Terraform Labs founder Do Kwon set up in 2022 to support TerraUSD (UST), a stablecoin that failed to maintain its US dollar peg. LFG was envisioned as a financial security with plans to accumulate $10 billion worth of Bitcoin and other assets, including AVAX, to stabilize the value of UST. In 2022, LFG purchased $100 million from AVAX as part of a strategic reserve, while the Avalanche Foundation purchased $200 million worth of UST and LUNA tokens, aiming to create mutual support between the two blockchain ecosystems.
However, the collaboration unraveled when UST collapsed, and the Avalanche Foundation suffered significant losses along with other Terra-affiliated organizations. Since then, Avalanche has been working to repurchase AVAX tokens and was only able to move forward after recently receiving approval from the bankruptcy court.
*This is not investment advice.