- Do Kwon ask SBF to reveal the attack they did on LUNA
- SBF accused of market manipulation by the US Feds
- Alameda placed a significant wager on the price of LUNC plummeting
The New York Times (NYT) reported on December 7 that a federal inquiry is ongoing to determine if FTX’s founder, Sam Bankman-Fried, manipulated the cryptocurrency market last spring. Thus, causing a domino effect that led to the collapse of his prior cryptocurrency exchange.
According to sources, U.S. officials are examining whether Mr. Bankman-Fried manipulated TerraUSD and Luna pricing to benefit the companies he controls, including FTX and the hedge fund he cofounded, Alameda Research.
According to reports, the unexpected rise in UST sell orders made it difficult to match them with equal buy orders, which increased the downward price pressure on UST, forcing it to detach from its planned 1:1 ratio with the U.S. Dollar.
This made Do Kwon, CEO of Terraform Labs react in a tweet post,
As the two cryptocurrencies were structured to be connected, the events also caused the devaluation of Terra’s native coin, Terra Classic, LUNC (previously LUNA).
The majority of USTC sell orders originated from Bankman-trading Fried’s firm Alameda research, according to the New York Times. There has been no definitive explanation for the collapse of LUNC and USTC.
Alameda Researched also placed a significant wager on the price of LUNC plummeting, according to a source familiar with the case who spoke with the New York Times.
As with most statements Bankman-Fried has made since FTX’s demise, the former CEO stated that he was unaware of any market manipulation.
To the best of my knowledge, all transactions were for investment or for hedging
In other news, Brian Armstrong, the chief executive officer of Coinbase Global Inc., predicted that this year’s income for the crypto exchange will be reduced by at least half. This comes after prices started to drop and investors’ faith was shaken by the demise of a competitor, FTX.
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