{"id":15615,"date":"2022-12-08T08:21:23","date_gmt":"2022-12-08T08:21:23","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/ftxs-bankman-fried-to-face-market-manipulation-probe-do-kwon-chimes-in\/"},"modified":"2022-12-08T08:21:25","modified_gmt":"2022-12-08T08:21:25","slug":"ftxs-bankman-fried-to-face-market-manipulation-probe-do-kwon-chimes-in","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/ftxs-bankman-fried-to-face-market-manipulation-probe-do-kwon-chimes-in\/","title":{"rendered":"FTX’s Bankman-Fried to face market manipulation probe, Do Kwon chimes in"},"content":{"rendered":"
<\/p>\n
United States federal prosecutors have reportedly begun investigating whether the collapse of the Terra ecosystem was in fact triggered by market manipulation tactics by former FTX CEO Sam Bankman-Fried.<\/p>\n
According to a Dec. 7 report from The New York Times (NYT), the prosecutors \u2014 as part of a broader inquiry into FTX\u2019s own collapse \u2014 are investigating whether Bankman-Fried\u2019s empire intentionally caused a flood of \u201csell\u201d orders on Terra\u2019s algorithmic stablecoin TerraClassicUSD, USTC (formerly UST).<\/p>\n
The sudden increase in UST sell orders were said to make it difficult to match them with corresponding \u201cbuy\u201d orders, which in turn forced more downward price pressure on UST, causing it to depeg from its intended 1:1 ratio with the U.S. Dollar. <\/p>\n
The events also led to the fall of Terra\u2019s native token, Terra Classic, LUNC (formerly LUNA) as the two cryptocurrencies were designed to be linked. <\/p>\n
But while no one has been able to precisely determine the root cause behind the collapse of LUNC and USTC in May, it is known that the majority of the USTC sell orders came from Bankman-Fried\u2019s trading firm Alameda research, according to the NYT.<\/p>\n
A person with knowledge on the matter also told NYT that Alameda Researched also placed a big bet on the price of LUNC falling. <\/p>\n
Like with most comments Bankman-Fried has shared since FTX\u2019s collapse, the former CEO claimed that he was \u201cnot aware of any market manipulation and certainly never intended to engage in market manipulation,\u201d according to NYT.<\/p>\n
\u201cTo the best of my knowledge, all transactions were for investment or for hedging,\u201d he added.<\/p>\n
Related: <\/em><\/strong>The nightmare continues for Sam Bankman-Fried and FTX \u2014 Law Decoded, Nov. 14-21\u00a0<\/em><\/strong><\/p>\n Responding to the recent report, Terraform Labs CEO Do Kwon shared his thoughts on the matter to his 1 million Twitter followers in a Nov. 8 tweet, who suggested it was time for Genesis Trading come clean about an alleged\u00a0 $1 billion loan in UST to \u201cSBF or Alameda\u201d shortly before Kwon\u2019s Terra ecosystem crashed. <\/p>\n I think the time has come for @GenesisTrading<\/a> to reveal if they provided the $1B UST shortly before the crash to SBF or Alameda – the purchase from LFG was represented as stemming from \u201cinterest to participate in the Terra Defi ecosystem\u201d – not to provide ammo for a peg attack<\/p>\n \u2014 Do Kwon (@stablekwon) December 8, 2022<\/a><\/p><\/blockquote>\n\n