The company behind the collapsing stablecoin Terra USD (UST), Luna Foundation Guard (LFG) said Monday, May 16, 2022 it has spent most of its reserves trying to defend its dollar peg last week. LFG will use the rest to try to compensate some users who have lost.
Reporting from Channel News Asia, Wednesday (18/5/2022), a Singapore-based non-profit organization designed to defend Terra USD, said on Twitter on Monday it would use the remaining assets to compensate for remaining users of the so-called stablecoin .
It will start with the smallest holder, though not yet to decide on the best method to do so.
The organization has built a large reserve including more than 80,000 Bitcoins and millions of dollars of other stablecoins to support UST , most of which is said to have been spent trying to shore up the token last week.
LFG initially pledged to increase its reserves of USD 10 billion or around Rp. 146.5 trillion in Bitcoin. Reserves fell to 313 Bitcoins as well as other assets as of now, the company said in a tweet.
Last week’s UST and Luna crashes also impacted cryptocurrency prices , which fell quite a bit last week.
The Fall of Terra usd UST Draws Regulator’s Attention
The incident has attracted particular attention, including from financial regulators, to stablecoins and the role they play in crypto systems as a primary medium for moving money between cryptocurrencies or for converting balances into cash.
Bank of France governor Francois Villeroy de Galhau told a conference crypto assets could disrupt the international financial system if they are not regulated and made operable in a consistent and compliant manner across jurisdictions. He points to the stablecoin UST as one source of risk.
Speaking separately, member of the European Central Bank’s executive board, Fabio Panetta, also said on Monday stablecoins were particularly vulnerable to run.
Tether, the world’s largest stablecoin, briefly lost 1:1 on May 12, before recovering. Unlike Terra USD, Tether is backed by reserves in traditional assets, according to its operating company.
Regulators elsewhere are also concerned about the incidents that occurred in the crypto market last week. The US Federal Reserve warned last week that stablecoins are vulnerable to investor moves because they are backed by assets that can lose value or become illiquid in times of market stress.
Crypto Prices Wednesday Morning 18 May 2022
Previously, the price of bitcoin and the top-tier crypto could finally move up to the green zone on Wednesday morning, May 18, 2022. Today’s top-tier crypto price experienced a small increase and left the red zone.
Based on data from Coinmarketcap, Wednesday morning, May 18, 2022, the cryptocurrency with the largest market cap, Bitcoin (BTC) gained 1.31 percent in 24 hours, but is still down 0.50 percent in the week.
Currently, the bitcoin price is at the level of USD 30,523.56 per coin .
Etheruem (ETH) also managed to strengthen slightly. Over the past 24 hours, ETH is up 2.26 percent. But still weakened 9.32 percent in the week. With that said, ETH is currently at USD 2,088.73 per coin.
The next cryptocurrency, Binance coin also strengthened. In the last 24 hours BNB is up 1.31 percent, but is down 3.05 percent for the week. This makes BNB priced at USD 304.81 per coin.
Then Cardano (ADA) also managed to strengthen slightly. In the past day the ADA was up 0.90 percent. But still down 7.60 percent for the week. Thus, ADA is at USD 0.5758 per coin.
Other Crypto Prices
Meanwhile, Solana (SOL) managed to leave the red zone today. Over the past one day SOL was up 2.74 percent but down 12.49 percent for the week. Currently, the price of SOL is at the level of USD 56.74 per coin.
XRP also managed to rebound. In the past day, XRP gained 1.43 percent. But still sinking 13.80 percent in a week. That way, XRP is now priced at USD 0.4356 per coin.
The fate of Terra (LUNA) is still quite worrying because of the de-pegging incident last week. Terra is still down 7.94 percent in the last 24 hours and 100 percent in the week. Currently Terra is priced at USD 0.0001835 per coin.
Stablecoin Tether (USDT) and USD coin (USDC), both rose 0.02 percent today. This makes USDT at the level of USD 0.9999 and USDC at the level of USD 1.00.
Binance USD (BUSD) is up 0.02 percent in the last 24 hours. Currently the price of BUSD is still holding at the level of USD 1.00 per coin.
While the Terra stablecoin, Terra USD (UST) rose 17.14 percent in the last 24 hours. Making the price at the level of USD 0.1332.