LFG is not compensating users soon.
The Luna Foundation Guard has mentioned that the dispersion of its remaining assets to affected investors is impossible now, noting that there is no distribution timeline yet.
The Terra collapse, fueled by the de-pegging of the algorithmic stablecoin UST, led to the loss of investor funds to tens of billions. Amidst the crash, the Luna Foundation Guard promised investors affected by the de-pegging of UST a distribution of its remaining assets as compensation for the losses.
Since May, investors have been anticipating the promised distribution with no timeline. LFG recently aggravated the tension felt by expecting proponents, noting that the distribution will not commence anytime soon.
The official Twitter account of the Luna Foundation Guard revealed the depressing news Friday in a thread of three tweets. LFG acknowledged investor interest in the nature and timeline of the distribution. It then reiterated its aim of distributing to the smallest holders first.
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
Notwithstanding, LFG revealed that the distribution of the assets is not particularly possible at this time. The entity cited the legal emerging issues surrounding the Terra collapse as reasons for the delay. Terraform Labs has faced litigation for the losses investors incurred from its debacle, with further lawsuits in sight.
“Unfortunately, due to ongoing and threatened litigation, distribution is not possible at this time. While these matters are outstanding, there can be no timeline established for resolution,” LFG said.
Additionally, LFG assured the community of the Terra team’s commitment to ensuring aggrieved investors are compensated, notwithstanding an emphasis on “small UST holders”. The organization also noted that people in anticipation would be the first to know of any new development.
“Our goal remains to distribute LFG’s remaining assets to small $UST holders. 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,” it concluded.
Recall that the Terra ecosystem collapsed with its algorithmic stablecoin UST sometime in May, leading to billions of dollars in losses for UST and LUNA holders. The Terra team’s attempts at repegging UST and salvaging whatever they can prove futile.
Having accepted its fate of an absolute debacle, LFG promised distribution of its remaining assets to affected holders of UST on May 11. Nevertheless, investors have had to wait up to 6 months for the distribution, with some already forgetting about it. Those in anticipation would have to keep waiting, as it appears the distribution will not be affected anytime soon.