Avalanche team buys back 2 million AVAX tokens from collapsed Terra blockchain

What’s new? Avalanche Foundation, a non-profit organization created to support the blockchain of the same name, has bought back AVAX native tokens in full from the team behind Do Kwon’s Terra blockchain that collapsed in May 2022. In October, the bankruptcy court for Terraform Labs authorized Avalanche Foundation to buy back 1,97 million AVAX for $52,8 million at the current exchange rate.

Material by The Block

What else is known? The NPO noted that the redeemed coins will be used to implement grant and incubation programs, organize events, and stimulate the community of users and developers of the Avalanche ecosystem.

In 2022, Terraform Labs founder Do Kwon launched the NPO Luna Foundation Guard to support the Terra blockchain. This organization purchased various cryptocurrencies, including AVAX and bitcoin, totaling over $10 billion.

The assets were used as a strategic reserve for the UST algorithmic stablecoin. The mechanism for maintaining the stable value of UST included burning and issuing LUNA tokens, also issued by Terraform Labs.

The strategy involved two transactions, with $100 million in AVAX going to Luna Foundation Guard and Avalanche Foundation receiving $200 million in UST and LUNA.

However, in May 2022, the value of both assets plummeted to near zero, causing tens of billions of dollars in losses to investors around the world. Before Kwon, there were fraud charges from regulators and class action lawsuits from investors in several countries at once. Since then, Avalanche Foundation has been working to buy back its native coins from the Terra team.

Terraform Labs will make one last upgrade to the Terra network before closing down

Employees expect the community to take care of maintaining the blockchain going forward

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In June this year, a jury in the United States found Terraform Labs and Do Kwon guilty of defrauding investors. The company agreed to settle claims by the US Securities and Exchange Commission (SEC) by paying a $4,7 billion fine and ceasing operations.

After Terra’s collapse, Kwon went on the run and was apprehended in Montenegro in March 2023 with a fake passport, for which he served four months in prison. He is still in the country awaiting extradition: South Korea and the United States have requested the extradition of the businessman, but the decision in favor of one or the other country has been delayed for many months.

Montenegro’s Constitutional Court cancels the decision on Do Kwon’s extradition

The extradition process has been suspended pending a decision on the businessman’s appeal

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As for Avalanche, the project continues to evolve. Last month, it launched its own cryptocurrency credit card in partnership with Visa. In September, it launched a $40 million Retro9000 grant program to support ecosystem developers ahead of the release of Avalanche9000, the biggest upgrade since the mainnet launched in 2020. It will simplify the launch of Layer 1 (L1) networks in the Avalanche ecosystem.

At the same time, it became known that investment company ParaFi Capital would partially tokenize its $1,2 billion venture fund with Avalanche.

In August, the first Hong Kong-licensed crypto exchange HashKey, whose parent company’s valuation exceeds $1 billion, received permission to retail AVAX.

AVAX ranks 16th in the overall cryptocurrency rating by market capitalization with a figure of $10,9 billion and is trading at $26,8, adding 1,8% overnight. Month-to-month growth was 0,9%, but the asset has fallen in price by 30,5% since the beginning of the year.