Avalanche says Luna Foundation Guard has disclosed "no plans" for AVAX tokens

Avalanche says Luna Foundation Guard has disclosed "no plans" for AVAX tokens

Avalanche, the smart contracts blockchain, says it is willing to work with Luna Foundation Guard on a "reasonable trading strategy" should the tokens be sold.

Avalanche, a smart-contract blockchain, said in a tweet that Luna Foundation Guard (LFG) - the entity behind the reserve fund set up to secure the now-failed Terra blockchain UST stablecoin - has "not disclosed any plans" for the 2 million AVAX tokens currently in its treasury.

"In light of the proposed Terra chain fork, LFG has not disclosed any plans to use AVAX," the tweet reads. "Should sales be considered for LFG reserves, Avalanche Foundation stands ready to work with LFG on a reasonable trading strategy."

With a fluctuating token price of $30 per token, the market value of AVAX's holdings is about $60 million, making it the second largest holding in LFG's shrinking $240 million treasury.

Avalanche said in the tweet that it provided the update because "some members of the Avalanche community have inquired about details of $AVAX reserves."

Crypto traders have speculated about what the plans were for the AVAX tokens - and what impact the sales might have on the market.

The announcement comes at a time when companies with strong ties to the Terra ecosystem, including $8 billion Layer 1 blockchain Avalanche, are facing calls for transparency from the community as they reckon with the market events of the past week.

Additionally, Avalanche announced in another tweet that Terra blockchain developer Terraform Labs (TFL) holds 1.1 million AVAX tokens.

TFL's tokens are subject to a one-year lockup period, according to the tweet.

The AVAX tokens held by TFL and LFG account for 0.5% and 0.9% of weekly token volume, respectively, according to Avalanche.

"AVAX is currently immobilized," the tweet reads.

CoinDesk reported in April that Luna Foundation Guard and Terraform Labs (TFL) - both organizations that support the Terra blockchain - announced that they had jointly acquired $200 million worth of AVAX tokens from the Avalanche Foundation.

In return, Avalanche Foundation received $100 million worth of LUNA from Terraform Labs and $100 million worth of the stablecoin UST from Luna Foundation Guard.

As of Thursday afternoon, LUNA was trading at $0.00013 and UST was trading at $0.08, representing a dramatic drop in the tokens' value. Thursday's tweet did not address the status of Avalanche Foundation's Terra-related tokens.

An Avalanche spokesperson did not immediately respond to a request for comment.