Terra's Backer Luna Foundation Guard Blames Litigation For Inability To Pay Back Investors

Luna Foundation Guard (LFG), the fund focused on the Terra ecosystem, shared over the weekend an update on the distribution of assets and pointed the blame on the "ongoing and threatened litigation" for its inability to pay back investors impacted by the spectacular collapse of TerraUSD (UST) and LUNA in May.

"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," LFG said on Twitter.

"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," the Twitter account added.

However, some investors are not convinced of the account's announcement, especially Terra and finance researcher FatManTerra who did not mince words when he responded to the tweet. The Terra investor, who later became an insider, shared a timeline of what happened between the time of the collapse and now and questioned why LFG did not distribute the assets.

"Excuses," FatmanTerra said. "May 9 - UST depeg, May 16 (7 days) - LFG commits to small holder refund, May 28 (19 days) - You launch an entire new blockchain & conduct a mass LUNA drop June 21 (43 days) - First Terra lawsuit is filed," the tweet read, detailing the timeline.

"You had loads of time to do a simple USDC airdrop. Why didn't you?" FatManTerra added. In another tweet, LFG assured investors of its commitment to distribute the remaining assets and will continue to advocate for the fulfillment of the initial plans.

"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," the follow-up tweet read.

"According to you, no TFL or LFG funds have been frozen. Why is distribution not possible? Be specific and show evidence. No, "threatened litigation" is not a valid answer. You scammed people and committed to a refund. Fulfill your promise," FatManTerra commented on the tweet, suggesting what LFG was saying is purely an alibi.