Avalanche Foundation Repurchases $56M Worth of AVAX Tokens From Terraform Labs' Bankrupt Estate
- Patricia ArquetteOriginal
- 2024-10-14 06:26:221097browse
In April 2022, the Luna Foundation Guard, a Singapore-based nonprofit which supported the since-collapsed Terra ecosystem with its stablecoin UST and token LUNA, purchased $100 million worth of Avalanche's
The Luna Foundation Guard (LFG), a Singapore-based nonprofit that supported the collapsed Terra ecosystem with its stablecoin UST and token LUNA, purchased $100 million worth of Avalanche's (AVAX) tokens in April 2022 to bolster its reserves.
As the fourth-largest stablecoin at the time, UST's collapse in May brought into question the fate of the AVAX tokens, which were set to be used to support the stablecoin's peg. Now, the Avalanche Foundation has announced that it has negotiated a deal to repurchase the 1.97 million tokens from Terraform Labs' bankrupt estate.
"This action ensures that LFG would not violate the original agreement’s restrictions on the tokens’ use and shields the tokens from the complexity of a bankruptcy trustee liquidation," the Avalanche Foundation wrote in its announcement post on X.
While the foundation did not include the financial terms of the deal in its announcement, the current value of 1.97 million Avalanche tokens is around $56 million at the list price, a 44% decrease from the stash's original $100 million value.
The agreement will be enacted pending approval from the bankruptcy court overseeing Terraform Labs' estate, according to the announcement. A bankruptcy judge approved Terraform Labs' move to wind down its operations in September following the settlement of its case with the SEC.
The price of Avalanche's token, which was as low as $25.16 on Oct. 10, has since risen over 13% to around $28.50 following the announcement and the growing popularity of the new video game Off The Grid, which has an in-game economy built on an Avalanche Subnet, according to The Block's Avalanche Price Page.
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