Avalanche Foundation Awaits Court Permission to Buy Back Tokens Sold in 2022

Just two years after selling off its tokens, Alanche Foundation is on the verge of completing a deal that would see it buy back its previously sold tokens.

In 2022, Avalanche Foundation sold off tokens worth $100 million to Singapore-based Luna Foundation Guard. Luna Foundation Guard is famed for their support of the defunct Terra ecosystem via its UST stablecoin and LUNA token. At the time of the initial purchase, UST sat at 4th position on the ranking of the world’s largest stablecoins. 

Luna Foundation Guard mentioned that the purchase of Avalanche Foundation’s tokens was to strengthen its reserve. However, Terra’s ecosystem became defunct in May 2022, an event that aroused uncertainty about the future of the AVAX tokens LUNA had in its possession. In a recent development, plans are in place for Avalanche Foundation to repurchase the tokens from Terraform Lab. The detail of the purchase is said to be around 1.97 million tokens. 

Legal proceedings are in place to ensure that the transaction doesn’t place LUNA Foundation Guard in a position where it violates stipulated terms on the use of the token while also protecting the token from the complex connections with a bankrupt estate. 
Although some details of the deal was publicized, the financial aspects were left to imagination. However, analysts have computed key details of the deal to come up with an estimated value.

With 1.97 million tokens in question, the current market valuation of the deal is about $56 million. Recall that in April 2022, the same amount of tokens went for $100 million, a 44% fall from the original value. Awaiting permission from the legal body presiding over the bankrupt estate of Terraform Lab, the final aspect of the transaction is still on hold.

Just last September, a ruling from bankruptcy court gave Terraform Labs the go-ahead to halt operations after it had resolved its issues with the Securities and Exchange Commission.