The Avalanche Foundation plans to repurchase 1.97 million AVAX tokens, which the Luna Foundation Guard (LFG) acquired in April 2022, a month before the collapse of the Terra ecosystem.
The Avalanche Foundation has negotiated an agreement to repurchase all AVAX tokens previously sold to the Luna Foundation Guard (LFG) in April 2022, which is now awaiting approval from the Bankruptcy Court.
This action ensures that LFG would not violate the original…
— Avalanche Foundation ? (@AvalancheFDN) October 11, 2024
“This action ensures that LFG does not violate the restrictions of the original agreement on the use of tokens, and protects them from the complexities [of the legal process], while returning 1.97 million AVAX to the foundation’s assets,” the statement reads.
The initiative awaits approval, with the relevant request submitted to the Delaware Bankruptcy Court in the United States on October 9.
The Avalanche Foundation will repurchase the coins from the bankruptcy estate of Terraform Labs (TFL) for $45.5 million (market value at the time of writing is approximately $58.9 million). In 2022, LFG paid $100 million for these tokens.
The asset price was calculated based on the average AVAX rate over a seven-day period in early August 2024.
TFL’s statement indicates that the settlement will reduce legal costs and decrease the volume of assets for distribution among creditors.
The buyback agreement was reached after the court approved the liquidation plan for the collapsed company in September. Preliminary estimates suggest the platform could pay all interested parties between $184.5 million and $442.2 million as part of the procedure.
Earlier, TFL and its co-founder Do Kwon agreed to settle claims with the U.S. Securities and Exchange Commission, paying a $4.47 billion fine.
Back in April, during a trial, a jury found Kwon and Terraform Labs guilty of deceiving investors and fraud. In South Korea, the entrepreneur faces numerous charges, including violations of capital market laws.