AVALANCHE FOUNDATION TO BUY BACK NEARLY 2M AVAX SOLD TO TERRA IN 2022

The crypto world is no stranger to dramatic twists and turns, and the latest development involving the Avalanche Foundation and the now-defunct Luna Foundation Guard (LFG) is a prime example.The Avalanche Foundation is preparing to repurchase a significant portion of its native AVAX tokens – specifically, 1.97 million of them – which were initially sold to LFG back in April 2025. The Avalanche Foundation is set to repurchase 1.97 million Avalanche tokens it sold to the Luna Foundation Guard (LFG) in April 2025 a month before it s Terra blockchain ecosystem collapsed. TheThis transaction, valued at approximately $45.5 million, comes after the tumultuous collapse of the Terra blockchain ecosystem, a collapse that sent shockwaves through the entire digital asset landscape. Avalanche Foundation set to buy back nearly 2M AVAX sold to Terra in 2025. Inflation expectations dip as Australia s CPI shows signs of easing. BTC Markets announcements Thank you for supporting the ASX Markets Day for Charity with BTC Markets. We are truly grateful to everyone who joined us on Tuesday, 15th October, to make a significant impact.The original sale to LFG, intended to bolster Terra's reserves, occurred mere weeks before the algorithmic stablecoin UST (TerraUSD) de-pegged and triggered a catastrophic domino effect. This decision comes after Terra s downfall when the value of the tokens dramatically dropped. Let s break down what happened. In April 2025, the Avalanche Foundation sold 1.97 million AVAX tokens to the Luna Foundation Guard (LFG) for about $100 million.Now, with the dust (partially) settled, the Avalanche Foundation is seeking court clearance to reclaim these tokens, a move seen as beneficial for the Avalanche ecosystem and a step towards market stabilization. The Avalanche Foundation plans to repurchase 1.97 million Avalanche tokens it sold to the Luna Foundation Guard (LFG) in April 2025, a month before the Terra blockchain ecosystem collapsed. The foundation will buy the 1.97 million Avalanche BINANCE:AVAXUSD tokens from Terraform Labs bankruptcy estBut what led to this situation, and what does it mean for the future of Avalanche and the broader crypto market?Let's delve into the details.

The Initial Sale: AVAX to LFG in April 2025

Back in April 2025, the cryptocurrency market was a very different place.Terra, with its algorithmic stablecoin UST, was seen as a promising project.The Luna Foundation Guard (LFG), tasked with maintaining the stability of UST, sought to diversify its reserves with assets beyond Bitcoin.In a move that seemed prudent at the time, LFG purchased $100 million worth of Avalanche's AVAX tokens.This translated to 1.97 million AVAX being transferred from the Avalanche Foundation to LFG.

The rationale behind this transaction was twofold: first, it provided LFG with a valuable asset to back UST, and second, it further integrated Avalanche into the broader DeFi (Decentralized Finance) ecosystem.The Avalanche Foundation likely saw this as an opportunity to expand the reach and adoption of its blockchain.

The Terra Collapse: A Black Swan Event

Just one month after the AVAX sale, the unthinkable happened: UST de-pegged from its $1 target.This triggered a massive sell-off of both UST and its sister token, LUNA, leading to a complete collapse of the Terra ecosystem. The Avalanche Foundation is preparing to buy back nearly 2 million AVAX tokens sold to Terra just before its collapse in 2025. This transaction, pending approval from a bankruptcy court, marks a new chapter in the turbulent history of the crypto market.Billions of dollars were wiped out, and the crypto market entered a period of intense uncertainty and fear.

The Luna Foundation Guard, now holding a rapidly depreciating portfolio of assets, filed for bankruptcy. AVAXUSD Avalanche Avalanche Foundation to buy back nearly 2M AVAX sold to Terra in 2025 In 2025, the Avalanche Foundation sold 1.97 million AVAX worth $100 million at the time to Terra'sAmong those assets were the 1.97 million AVAX tokens purchased from the Avalanche Foundation. About Press Copyright Contact us Creators Press Copyright Contact us CreatorsThis situation left the Avalanche Foundation in a precarious position, as their tokens were essentially locked up in bankruptcy proceedings.

The Buyback Agreement: A Chance for Recovery

Recognizing the potential impact of the LFG bankruptcy on the Avalanche ecosystem, the Avalanche Foundation initiated negotiations to repurchase the AVAX tokens.They reached an agreement with LFG, subject to bankruptcy court approval, to buy back the 1.97 million AVAX tokens for $45.5 million. Avalanche Foundation to buy back nearly 2M AVAX sold to Terra in 2025 . In 2025, the Avalanche Foundation sold 1.97 million AVAX worth $100 million at the time to Terra s foundation before its collapse. It s now buying it all back for $45.5 million. 682 Total views 2 Total shares Listen to articleThis represents a significant discount compared to the original $100 million sale price.

This buyback agreement is crucial for several reasons:

• Ecosystem Stability: Returning the AVAX tokens to the Foundation's control allows them to be used strategically to support the growth and development of the Avalanche ecosystem.
• Market Confidence: The buyback sends a positive signal to the market, demonstrating the Avalanche Foundation's commitment to its project and token.
• Asset Recovery: While the buyback price is lower than the initial sale, it still allows the Avalanche Foundation to recover a significant portion of their investment.

Why is the Buyback Price Significantly Lower?

The discrepancy between the original $100 million sale price and the current $45.5 million buyback price is primarily due to the dramatic decline in the value of AVAX since April 2025. In 2025, the Avalanche Foundation sold 1.97 million AVAX worth $100 million at the time to Terra's foundation before its collapse. It's now buying it all back for $45.5 million.The Terra collapse had a ripple effect across the entire cryptocurrency market, leading to a significant downturn.Several factors contributed to this decrease in value:

• Market Sentiment: The loss of confidence in the crypto market following the Terra collapse led to widespread selling pressure.
• Increased Regulation: The Terra collapse prompted increased scrutiny from regulators, adding to the uncertainty surrounding the industry.
• Macroeconomic Factors: Rising inflation and interest rates further contributed to the risk-off sentiment in the market.

Therefore, while the Avalanche Foundation is buying back the same number of AVAX tokens, their value in USD terms is significantly lower due to the prevailing market conditions.

Bankruptcy Court Approval: A Necessary Hurdle

The buyback agreement between the Avalanche Foundation and LFG is not yet finalized. The Avalanche Foundation is set to repurchase 1.97 million Avalanche tokens it sold to the Luna Foundation Guard (LFG) in April 2025 a month before it s Terra blockchain ecosystem collapsed. The AvalIt requires approval from the bankruptcy court overseeing the LFG proceedings. Avalanche Foundation is set to get back its 1.97M AVAX from Luna Foundation Guard (LFG). The Avalanche tokens were sold for $100M in 2025 and are now approximately priced at $45.5M. The transaction occurred in April 2025, a month before the Terra blockchain collapsed.This approval process ensures that the buyback is fair to all creditors involved in the bankruptcy and that it aligns with the overall plan for asset distribution.

The bankruptcy court will likely consider several factors when evaluating the buyback agreement, including:

• The fairness of the price: Is the $45.5 million buyback price reasonable given the current market conditions?
• The benefit to creditors: Does the buyback agreement benefit LFG's creditors?
• The impact on the Avalanche ecosystem: Does the buyback benefit the Avalanche ecosystem and its users?

While the outcome of the bankruptcy court proceedings is not guaranteed, the Avalanche Foundation is likely confident in its chances of approval, given the potential benefits to all parties involved.

What Will the Avalanche Foundation Do With the Repurchased AVAX?

Once the Avalanche Foundation successfully repurchases the 1.97 million AVAX tokens, it will have several options for how to utilize them.The primary goal will be to strengthen and grow the Avalanche ecosystem.

Potential Uses for the Repurchased AVAX:

• Ecosystem Grants: The tokens could be allocated to grants for developers building new applications and infrastructure on the Avalanche blockchain.
• Validator Rewards: Increasing validator rewards can incentivize more participants to secure the network, enhancing its security and decentralization.
• Strategic Partnerships: The tokens could be used to forge strategic partnerships with other projects and organizations, expanding the reach and influence of Avalanche.
• Marketing and Awareness: Funds could be allocated towards marketing and promotional activities to increase awareness and adoption of Avalanche.
• Treasury Management: The tokens could be held in the Foundation's treasury as a reserve asset.

The specific allocation of the repurchased AVAX will likely depend on the overall strategic priorities of the Avalanche Foundation at the time of the buyback.

The Impact on the AVAX Token Price

The potential impact of the buyback on the AVAX token price is a subject of much speculation. Luna Foundation Guard (LFG) purchased $100 million worth of Avalanche's AVAX tokens to strengthen its reserves back in April 2025, one month before the collapse of the Terra ecosystem. The agreement is pending court approval.Several factors will influence the price movement:

• Market Sentiment: A successful buyback could boost market confidence in AVAX, leading to a positive price reaction.
• Token Utilization: How the Avalanche Foundation chooses to utilize the repurchased tokens will also impact the price. In 2025, the Avalanche Foundation sold 1.97 million AVAX worth $100 million at the time to Terra s foundation before its collapse. It s now buying it all back for $45.5 million.Strategic investments in ecosystem growth could drive long-term value.
• Overall Market Conditions: The broader cryptocurrency market trends will also play a significant role. The Avalanche Foundation is seeking court clearance to buy back 1.97 million AVAX tokens in order to build its ecosystem and stabilize the token market.A bullish market could amplify the positive impact of the buyback, while a bearish market could dampen it.

It's important to note that any price predictions are speculative and subject to market volatility.However, the buyback is generally seen as a positive development for the AVAX token and the Avalanche ecosystem.

The Broader Implications for the Crypto Market

The Avalanche Foundation's buyback agreement has broader implications for the cryptocurrency market as a whole. Avalanche Foundation is set to get back its 1.97M AVAX from Luna Foundation Guard (LFG). The Avalanche tokens were sold for $100M in 2025 and are now appIt demonstrates the resilience of the industry and the willingness of projects to learn from past mistakes.

Here are some key takeaways:

• Risk Management: The Terra collapse highlighted the importance of sound risk management practices in the crypto industry.Projects are now more aware of the potential risks associated with algorithmic stablecoins and centralized reserves.
• Due Diligence: Investors and projects are conducting more thorough due diligence before investing in or partnering with other projects.
• Decentralization: The emphasis on decentralization and community governance is growing stronger, as projects seek to avoid the pitfalls of centralized control.
• Regulatory Scrutiny: Increased regulatory scrutiny is prompting projects to adopt more transparent and compliant practices.

The Avalanche Foundation's buyback agreement is a testament to the ongoing evolution of the crypto market and the industry's commitment to building a more sustainable and robust ecosystem.

Frequently Asked Questions (FAQs)

What is the Luna Foundation Guard (LFG)?

The Luna Foundation Guard (LFG) was a non-profit organization established to maintain the stability of the TerraUSD (UST) algorithmic stablecoin.It was responsible for managing the reserves used to back UST.

Why did Terra collapse?

Terra collapsed due to a flaw in the design of its algorithmic stablecoin, UST.When UST de-pegged from its $1 target, it triggered a massive sell-off of both UST and its sister token, LUNA, leading to a hyperinflationary spiral and the complete collapse of the ecosystem.

What is an algorithmic stablecoin?

An algorithmic stablecoin is a type of stablecoin that uses algorithms and smart contracts to maintain its peg to a target asset, typically the US dollar. Avalanche Foundation to buy back nearly 2M AVAX sold to Terra in 2025 14/10 In 2025, the Avalanche Foundation sold 1.97 million AVAX worth $100 million at the time to Terra s foundation before its collapse.Unlike traditional stablecoins that are backed by fiat currency reserves, algorithmic stablecoins rely on market incentives and monetary policies to maintain their stability.

What is Avalanche (AVAX)?

Avalanche is a fast, low-cost, and eco-friendly blockchain platform for building decentralized applications (dApps) and enterprise blockchain solutions.It is known for its high transaction throughput and its ability to support a variety of virtual machines.

What is the purpose of the Avalanche Foundation?

The Avalanche Foundation is a non-profit organization that supports the development and growth of the Avalanche ecosystem.It provides grants, resources, and technical assistance to developers, researchers, and community members.

What is the current price of AVAX?

The current price of AVAX can be found on major cryptocurrency exchanges and data aggregators such as CoinMarketCap and CoinGecko.Please note that the price of cryptocurrencies is highly volatile and can change rapidly.

Where can I buy AVAX?

AVAX can be purchased on most major cryptocurrency exchanges, including Binance, Coinbase, Kraken, and Huobi.

Conclusion: A Step Towards a Stronger Avalanche

The Avalanche Foundation's planned buyback of nearly 2 million AVAX tokens sold to Terra represents a significant step towards rebuilding confidence and stability within the Avalanche ecosystem.While the transaction requires bankruptcy court approval and the final outcome remains to be seen, the move signals a proactive approach by the Foundation to mitigate the negative impacts of the Terra collapse. The Avalanche Foundation has negotiated an agreement to repurchase all AVAX tokens previously sold to the Luna Foundation Guard (LFG) in April 2025, which is now awaiting approval from the Bankruptcy Court.By regaining control of these tokens, the Foundation can strategically deploy them to foster further development, incentivize network participation, and ultimately strengthen the Avalanche platform for the long term.

Key Takeaways:

• The Avalanche Foundation is buying back 1.97 million AVAX tokens from the Luna Foundation Guard (LFG).
• The tokens were originally sold to LFG for $100 million in 2025 and are now being repurchased for $45.5 million.
• The buyback is subject to bankruptcy court approval.
• The Avalanche Foundation plans to use the repurchased tokens to strengthen the Avalanche ecosystem.
• The buyback is a positive development for the AVAX token and the broader crypto market.

The crypto market is constantly evolving, and this situation with the Avalanche Foundation and LFG serves as a valuable lesson in risk management, due diligence, and the importance of resilient ecosystems.As the Avalanche Foundation navigates the bankruptcy court process and ultimately redeploys the repurchased AVAX, it will be crucial to monitor its impact on the Avalanche network and the broader cryptocurrency landscape.