US prosecutors, FTX founder behind Terra ecosystem collapse Sam Bankman-Fried He began to investigate whether
According to the news reported by the New York Times (NYT), US prosecutors, depending on the investigation of the collapse of FTX TerraClassicUSD (UST) is investigating whether FTX and SBF were behind the crash.
Koinfinans.com As we reported, the spike in UST sell orders in May triggered downward pressure on the algorithmic stablecoin. Despite the high selling pressure, the weak buying side lost 1:1 against the US dollar.
Supporting UST with algorithmically different coins is the Terra ecosystem. LUNA affected its existence. As a result, the LUNA price had gone to almost zero.
Indeed, the main reason behind the collapse of LUNC and USTC in May, no one has been able to pinpoint. However, most USTC sell orders allegedly come from Bankman-Fried’s Alameda Research.
Someone speaking to the NYT claimed that Alameda Research has options on the LUNC price drop.
Sam Bankman-Fried claimed that he was unaware of the market manipulation, as he has often stated since the FTX crash. “As far as I know, all transactions were for investment or hedging purposes,” he added.
Terraform Labs CEO responding to the news Do Kwonhighlighted the $1 billion UST loan granted before the Terra collapse.
I think the time has come for @GenesisTrading to reveal if they provided the $1B UST shortly before the crash to SBF or Alameda – the purchase from LFG was represented as stemming from “interest to participate in the Terra Defi ecosystem” – not to provide ammo for a peg attack
— Do Kwon 🌕 (@stablekwon) December 8, 2022
The aforementioned $1 billion UST loan was allegedly received for the Terra ecosystem. As a matter of fact, Genesis Trading avoids a detailed explanation on the subject.
Kwon also noted that a major currency contraction the UST went through in February 2021 was initiated by Alameda “when they sold 500mm of UST within minutes to drain their curve pools during the MIM crisis.”
“What was done in the dark will come to light,” Kwon added.
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