FTX's Bankman-Fried to face market manipulation probe, Do Kwon chimes in

United States national prosecutors person reportedly begun investigating whether the illness of the Terra ecosystem was successful information triggered by marketplace manipulation tactics by erstwhile FTX CEO Sam Bankman-Fried.

According to a Dec. 7 report from The New York Times (NYT), the prosecutors — arsenic portion of a broader enquiry into FTX’s ain illness — are investigating whether Bankman-Fried’s empire intentionally caused a flood of “sell” orders connected Terra’s algorithmic stablecoin TerraClassicUSD, USTC (formerly UST).

The abrupt summation successful UST merchantability orders were said to marque it hard to lucifer them with corresponding “buy” orders, which successful crook forced much downward terms unit connected UST, causing it to depeg from its intended 1:1 ratio with the U.S. Dollar.

The events besides led to the autumn of Terra’s autochthonal token, Terra Classic, LUNC (formerly LUNA) arsenic the 2 cryptocurrencies were designed to beryllium linked.

But portion nary 1 has been capable to precisely find the basal origin down the illness of LUNC and USTC successful May, it is known that the bulk of the USTC merchantability orders came from Bankman-Fried’s trading steadfast Alameda research, according to the NYT.

A idiosyncratic with cognition connected the substance besides told NYT that Alameda Researched besides placed a large stake connected the terms of LUNC falling.

Like with astir comments Bankman-Fried has shared since FTX’s collapse, the erstwhile CEO claimed that helium was “not alert of immoderate marketplace manipulation and surely ne'er intended to prosecute successful marketplace manipulation,” according to NYT.

“To the champion of my knowledge, each transactions were for concern oregon for hedging,” helium added.

Related: The nightmare continues for Sam Bankman-Fried and FTX — Law Decoded, Nov. 14-21 

Responding to the caller report, Terraform Labs CEO Do Kwon shared his thoughts connected the substance to his 1 cardinal Twitter followers successful a Nov. 8 tweet, who suggested it was clip for Genesis Trading travel cleanable astir an alleged  $1 cardinal indebtedness successful UST to “SBF oregon Alameda” soon earlier Kwon’s Terra ecosystem crashed.

I deliberation the clip has travel for @GenesisTrading to uncover if they provided the $1B UST soon earlier the clang to SBF oregon Alameda - the acquisition from LFG was represented arsenic stemming from “interest to enactment successful the Terra Defi ecosystem” - not to supply ammo for a peg attack

— Do Kwon (@stablekwon) December 8, 2022

Kwon besides stated that a ample currency contraction that UST underwent successful Feb. 2021 was started by Alameda “when they sold 500mm UST successful minutes to drain its curve pools during the MIM crisis.”

“What’s done successful acheronian volition travel to light,” Kwon added connected the matter.