Sam Bankman-Fried reportedly has a hand in the crash of UST and LUNA.

Orchestrated Terra’s Catastrophe?

According to a piece of recent information from New York Times coverage, US authorities have doubts that Bankman-Fried may have played a role in the collapse of UST – Terra’s algorithmic stablecoin and LUNA its native token.

Those who are quite familiar with the issue revealed that he might have manipulated the market to profit from the organizations he controlled – FTX and Alameda Research. His actions might have triggered the downfall of Terra and resulted in the consecutive domino effect in the entire industry.

The investigation being carried out is still in its early days, and prosecutors are yet to determine whether the 30-year-old American is guilty or not.

Co-Founder of Terraform Labs – Do Kwon – shared the report on his Twitter account, which read, “what’s done in darkness will come to light.”

Do Kwon believes that Genesis Trading provided Sam Bankman-Fried or Alameda Research $1 billion in UST before the stablecoin’s de-peg. 

The South Korean further questioned why Alameda borrowed over $1 billion worth of bitcoin from Voyager during the de-peg and why it requested other leading companies to obtain over $10 million in BTC.

FTX and Terra: The Negative Highlights of 2022

The crash of cryptocurrency exchange FTX and that of blockchain protocol – Terra – are without doubt the most negative events that have occurred within the industry in recent times.

The latter’s problems began in May when UST lost its peg and tanked way below the target of $1. Due to the algorithmic nature of the asset and its connection with LUNA, certain traders managed to take advantage of this and made profits by arbitrage trading it. As a result of this, the prices of both tokens were essentially driven to virtually zero in a couple of days.

As mentioned above, FTX was faced with liquidity issues and crashed spectacularly, which triggered a market decline and colossal problems for a number of companies and individuals involved with it.

Sam Bankman-Fried for his part has given some controversial comments as regards the adverse event but so far has failed to provide concise information on how it all went down. Many, including Elon Musk and CZ, essentially called him a fraudster.

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