Luna Foundation Guard: $3 Billion Bitcoin Dumped in 48 Hours
Between January and April 2022, the Luna Foundation Guard (LFG) accumulated a massive Bitcoin reserve worth over $3 billion. This reserve was intended to defend the peg of TerraUSD (UST), a stablecoin issued by Terraform Labs. However, on May 9, 2022, LFG made the decision to sell its entire Bitcoin reserve over the course of 48 hours, sparking a market crash that would have far-reaching consequences.
On May 9, 2022, alone, LFG sold over $1.5 billion worth of Bitcoin, flooding the market with a massive amount of sell orders. This dump was made into a rapidly crashing market, with Bitcoin prices plummeting by over 20% in a matter of hours. On-chain data reveals that the sold Bitcoin was largely absorbed by a handful of major exchanges, including Binance and Gemini.
The sale resulted in over $200 million in slippage and market impact, a staggering amount that highlights the reckless nature of LFG's decision. The question on everyone's mind is: who received this liquidity at those prices? Was it a small group of insiders, or was it a broader market phenomenon? The answer to this question remains unclear, as LFG never published a full accounting of the sale.
The lack of transparency surrounding the sale is troubling, to say the least. As a major player in the cryptocurrency market, LFG had a responsibility to act with integrity and transparency. Instead, the foundation's actions were shrouded in secrecy, leaving market participants to pick up the pieces.
The consequences of LFG's actions were severe. The UST peg was ultimately broken, leading to a catastrophic collapse of the Terra ecosystem. The value of Luna (LUNA), the native token of the Terra blockchain, plummeted to near zero, wiping out billions of dollars in investor value.
As the cryptocurrency market continues to grapple with the aftermath of LFG's disastrous decision, one thing is clear: the need for transparency and accountability in the industry has never been more pressing. The fact that a single entity could dump $3 billion worth of Bitcoin on the market without facing any consequences is a stark reminder of the Wild West nature of the cryptocurrency market. Will we ever see a full reckoning for LFG's actions, or will the foundation's leaders continue to operate with impunity, leaving market participants to suffer the consequences of their reckless decisions?
Crypto Scandals & History
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2026-03-26 11:00:04 UTC
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wss://relay.damus.ioPublished at
2026-03-26 11:00:04 UTCEvent JSON
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"content": "Luna Foundation Guard: $3 Billion Bitcoin Dumped in 48 Hours\n\nBetween January and April 2022, the Luna Foundation Guard (LFG) accumulated a massive Bitcoin reserve worth over $3 billion. This reserve was intended to defend the peg of TerraUSD (UST), a stablecoin issued by Terraform Labs. However, on May 9, 2022, LFG made the decision to sell its entire Bitcoin reserve over the course of 48 hours, sparking a market crash that would have far-reaching consequences.\n\nOn May 9, 2022, alone, LFG sold over $1.5 billion worth of Bitcoin, flooding the market with a massive amount of sell orders. This dump was made into a rapidly crashing market, with Bitcoin prices plummeting by over 20% in a matter of hours. On-chain data reveals that the sold Bitcoin was largely absorbed by a handful of major exchanges, including Binance and Gemini.\n\nThe sale resulted in over $200 million in slippage and market impact, a staggering amount that highlights the reckless nature of LFG's decision. The question on everyone's mind is: who received this liquidity at those prices? Was it a small group of insiders, or was it a broader market phenomenon? The answer to this question remains unclear, as LFG never published a full accounting of the sale.\n\nThe lack of transparency surrounding the sale is troubling, to say the least. As a major player in the cryptocurrency market, LFG had a responsibility to act with integrity and transparency. Instead, the foundation's actions were shrouded in secrecy, leaving market participants to pick up the pieces.\n\nThe consequences of LFG's actions were severe. The UST peg was ultimately broken, leading to a catastrophic collapse of the Terra ecosystem. The value of Luna (LUNA), the native token of the Terra blockchain, plummeted to near zero, wiping out billions of dollars in investor value.\n\nAs the cryptocurrency market continues to grapple with the aftermath of LFG's disastrous decision, one thing is clear: the need for transparency and accountability in the industry has never been more pressing. The fact that a single entity could dump $3 billion worth of Bitcoin on the market without facing any consequences is a stark reminder of the Wild West nature of the cryptocurrency market. Will we ever see a full reckoning for LFG's actions, or will the foundation's leaders continue to operate with impunity, leaving market participants to suffer the consequences of their reckless decisions?",
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