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They bought Luna to stake it to validators. As Luna death spiraled it would be cheaper for an attacker to spin up a validator and buy millions of cheap Luna to attack the network. With 51% of all staked Luna a single validator could own consensus and steal all the bEth on chain
So just to confirm, LFG only had that small amount of money left. The BTC sent to Binance and Gemini are already used up?
They have 313 out of their 80k BTC remaining.
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Unpacking the latest LFG announcement.
- They plowed about $1b of the Bitcoin reserves into UST exit liquidity for whales who were cashing out of Anchor
- They plowed about $500m more into LUNA liquidity to support large cashouts (the LUNA is now worthless) 
