Avalanche Foundation Buys Back 1.97M AVAX Tokens From Luna Foundation Guard (LFG)

The Avalanche Foundation has officially finalized the buyback of its 1.97 million AVAX tokens earlier acquired by Luna Foundation Guard (LFG).

The Avalanche Foundation has completed the buyback of 1.97 million AVAX tokens that were previously sold to the Luna Foundation Guard (LFG) in 2022. The foundation reportedly spent $53 million on the repurchase, which is higher than the $45.5 million stated in the filing.

According to a recent tweet by the Avalanche Foundation, the company successfully negotiated the repurchase of 1.97 million AVAX tokens that were sold to LFG last year. The foundation stated that it paid a total of $53 million for the tokens, which is higher than the $45.5 million reported in the SEC filing. The foundation also highlighted that the tokens were purchased at a current price of $23.95.

The repurchase was part of a broader effort by the foundation to lay a solid foundation for future initiatives. The acquired funds will be used to support important ecosystem projects, such as developer events, incubators, and grants.

This action ensures that LFG does not violate the original agreement's restrictions on the tokens' use and shields the tokens from the complexity of a bankruptcy trustee liquidation. The foundation will return 1.97 million AVAX to its holdings.

Earlier this year, Terraform Labs, the company behind the failed stablecoin TerraUSD (UST), filed for Chapter 11 bankruptcy protection in the United States. The company's assets, including a large portion of AVAX tokens, were frozen as part of the proceedings.

However, a recent agreement between the foundation and LFG allowed for the repurchase of the tokens. According to a report by Terraform, the settlement will significantly reduce litigation costs and increase the assets available for distribution to creditors.

The settlement amount was reportedly based on the seven-day volume-weighted average price of AVAX tokens in August. As part of the agreement, the foundation will use the repurchased tokens to support ecosystem initiatives and return them to the foundation's holdings.

Terraform was found liable for defrauding investors in 2022, and the court ordered Kwon and his company to pay $4.5 billion in fines and penalties. However, the company disclosed in a recent bankruptcy hearing that it could only pay $185 million and $442 million.

Meanwhile, AVAX is showing signs of preparing for a bullish run as it continues to climb the ranks of cryptocurrencies by market capitalization. At press time, the asset is the 13th largest crypto by market cap.

The token is trading at $26.78, up 5% in the last seven days and 22% in the last 90 days. However, its trading volume is down 18%, with $467 million changing hands at press time.