The AVAX tokens were sold by the Avalanche Foundation to the Luna Foundation Guard in 04/2022 to form a reserve fund for LUNA - UST.
Avalanche Foundation has repurchased 54 million USD worth of AVAX tokens from the Luna Foundation Guard. Image: Avalanche
According to the announcement posted in the early morning of October 12, 2024, the organization behind the Avalanche (AVAX) blockchain, the Avalanche Foundation, said it had reached an agreement with the Luna Foundation Guard (LFG) to repurchase all the AVAX tokens previously sold to LFG.
The Avalanche Foundation has negotiated an agreement to repurchase all AVAX tokens previously sold to the Luna Foundation Guard (LFG) in April 2022, which is now awaiting approval from the Bankruptcy Court.
— Avalanche Foundation 🔺 (@AvalancheFDN) October 11, 2024
This action ensures that LFG would not violate the original…
In early 04/2022, the Avalanche Foundation sold 1.97 million AVAX to LFG, to support the plan to build a crypto reserve fund to back the LUNA - UST model of the Luna Foundation Guard. At that time, these tokens were worth up to 200 million USD, but still only accounted for a small part of the total assets of over 3 billion USD of LFG.
However, just 1 month later, the entire LUNA - UST ecosystem collapsed completely, with LFG having to sell up to 3 billion USD worth of Bitcoin within a week to save the UST price, but still failed.
At that time, the Avalanche Foundation also proposed to buy back all the AVAX tokens to minimize the risk of being liquidated by LFG, but was bogged down by countless procedures and delays from then until now.
However, according to the latest announcement, the Avalanche Foundation said it had reached an agreement with the Luna Foundation Guard to repurchase 1.97 million AVAX, pending approval from the Bankruptcy Court. This means that the above tokens will not be sold on the market, avoiding negative impacts on the Avalanche ecosystem.
The AVAX price on the morning of October 12 has increased by up to 10% thanks to this news.
1h chart of the AVAX/USDT pair on the Binance exchange at 09:55 AM on 12/10/2024
Meanwhile, the company behind the LUNA - UST ecosystem, Terraform Labs, in June 2024 agreed to pay a fine of 4.47 billion USD to the US SEC, and declared bankruptcy. The project founder, Do Kwon, is currently being detained in Montenegro as the authorities there have not yet made a final decision on whether to extradite him to the US or South Korea.
Compiled by Coin68
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