Was Sam Bankman-Fried to blame for the unfortunate Terra crash in May?

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According to recent reports, federal prosecutors are investigating whether Sam Bankman-Fried, the founder of FTX, manipulated the market for two cryptocurrencies last spring, causing them to disappear and setting off a chain reaction that ultimately led to the collapse of its own cryptocurrency exchange. last month.

It is currently unclear what the outcome of the investigation will be and what impact it may have on the cryptocurrency industry as a whole. It’s also unclear what Bankman-Fried’s position on the matter is. Also, was there a connection between FTX and the Terras crash?

Was Bankman-Fried involved in the Terra/Luna Crash?

The likelihood that Bankman-Fried manipulated the prices of two interconnected currencies, TerraUSD and Luna, to benefit companies he controlled, such as FTX and Alameda Research, a hedge fund he co-founded and owned, is being scrutinized by the American authorities in Manhattan.

Since this investigation is just beginning, it is unclear whether or not authorities found evidence of Bankman’s crime or when they began investigating the TerraUSD and Luna transactions. The case is part of a larger investigation into the collapse of FTX and the alleged loss of billions of dollars in client assets.

Previous reports have also indicated that Terra’s stablecoin was not pegged to the dollar in May. The company that created it, Terraform Labs, flooded the market with LUNA tokens to maintain peg stability. This plan backfired, LUNA crashed and UST fell again, triggering the first widespread cryptocurrency panic of the year, the effects of which we are still feeling to this day.

According to some shocking insider sources, FTX has been behind a deluge of US Treasury (UST) sell orders. Small quantities were ordered quickly.

It’s worth pointing out that the people pushing the initiative may have made significant profits from Luna’s price cuts. However, the entire system crashed, wiping up to a trillion dollars from the cryptocurrency markets and causing a subsequent crash.

Six months later, the aftermath of this crash effectively ended SBF’s crypto empire.

Wrap

The reasons for the fluctuations of the two cryptocurrencies are unknown at this time and it could be dangerous to try to assume anything.

All we can hope for is that some big players in the market can’t profit from the misfortune of others and get justice soon enough.

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