Latest News News

FTX’s Bankman-Fried to Face Market Manipulation Probe, Do Kwon Chimes In

Federal prosecutors are investigating the role that FTX and Alameda may have played in Terra LUNA’s demise as part of a larger investigation into FTX’s demise.

Federal prosecutors in the United States are reportedly investigating whether the Terra ecosystem’s collapse was caused by market manipulation tactics employed by former FTX CEO Sam Bankman-Fried.

According to a December 7 report from The New York Times (NYT), prosecutors are investigating whether Bankman-empire Fried’s intentionally caused a flood of “sell” orders on Terra’s algorithmic stablecoin TerraClassicUSD, USTC (formerly UST).

The sudden increase in UST sales orders were said to make matching them with corresponding “buy” orders difficult, putting more downward pressure on UST and causing it to depeg from its intended 1:1 ratio with the US Dollar.

As the two cryptocurrencies were designed to be linked, the events also resulted in the demise of Terra’s native token, Terra Classic, LUNC (formerly LUNA).

While no one has been able to pinpoint the exact cause of the LUNC and USTC collapses in May, it is known that the majority of USTC sell orders came from Bankman-trading Fried’s firm Alameda research, according to the NYT.

According to a source familiar with the situation, Alameda Researched has also placed a large bet on the price of LUNC falling.

According to the New York Times, like most of Bankman-comments Fried’s since FTX’s demise, the former CEO stated that he was “not aware of any market manipulation and certainly never intended to engage in market manipulation.”

“To the best of my knowledge,” he added, “all transactions were for investment or hedging.”

In response to the recent report, Terraform Labs CEO Do Kwon tweeted to his 1 million followers on Nov. 8 that it was time for Genesis Trading to come clean about an alleged $1 billion loan in UST to “SBF or Alameda” shortly before Kwon’s Terra ecosystem crashed.

Kwon also stated that Alameda started the large currency contraction that UST experienced in February 2021 “when they sold 500mm UST in minutes to drain its curve pools during the MIM crisis.”

“What is done in the dark will be revealed,” Kwon elaborated on the subject.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.