- The foundation stated that the lawsuit has been filed to make certain that LFG will not commit a breach of the restrictions mentioned over the original agreement.
- Terraform Labs at the time of filing has mentioned that the agreement will help in lessening the litigation costs.
- Not exceeding a month, USTC dropped and traded at $0.006 followed by losing its peg with the US dollar.
A non-profit organization which supports the growth of the Avalanche platform, the Avalanche Foundation is going to buy 1.97 million Avalanche tokens back. Two years ago, the token was sold to the Luna Foundation Guard following the drop of Terra blockchain ecosystem.
The deal is to buy 1.97 million AVAX tokens by giving $45.5 million which holds a market worth of about $57.4 million.
The Avalanche Foundation took social media platform X to share its views on October 11 and mentioned that, A recapture agreement and settlement was filed in a Delaware Bankruptcy Court and now we are waiting for the approval. The case was filed on October 9.
The foundation further went on stating that the lawsuit has been filed to make certain that LFG will not commit a breach of the restrictions mentioned over original agreement in the matter of the use of tokens. Also, it protects the tokens from the difficulty of bankruptcy trustee liquidation at the time of giving 1.97M AVAX back to the Foundation.
At this time, the worth of the total tokens yet to be repurchased is 42% as compared to the time of selling it to the LFG.
Terraform Labs stand on the filing
Terraform Labs at the time of filing has mentioned that the agreement will help in lessening the litigation costs as well as fewer assets which are set to give out to the creditors. The blockchain protocol also added that the filing will make sure that all the amount has been recovered which is at a deal of current market value of the total tokens.
In the beginning of August of this year, the settlement amount was so far decided. It was decided and obtained over the volume-weighted average price of the tokens in a week.
USTC slipping down
Talking about the Luna Foundation Guard, it is a non-profit organization which focuses mainly on creating and carrying on the reserves for stablecoin of Terra i.e, TerraClassicUSD (USTC). Not exceeding a month, USTC dropped and traded at $0.006 followed by losing its peg with the US dollar.
Terraform Labs has also traded LUNC whose worth was around $100 million for getting AVAX this year. The judge of Delaware bankruptcy accepted the demand of Terraform to take a break from its operation in September 2024. The decision was taken due to a settlement of $4.5 billion with the SEC in June of this year.
The blockchain protocol and payment platform said that it will be able to pay between $185 million to $442 million for the closure as the actual losses were not possible to calculate.
