Two scandals that come together? Sam Bankman-Fried is the subject of a new investigation, for the role that FTX and Alameda could have played in the fall of the Terra ecosystem last May. The point on what we know for the moment.
Could Sam Bankman-Fried have a connection to the fall of Terra?
The news was reported by The New York Times, which cites unnamed sources familiar with the matter. US federal prosecutors are reportedly looking into possible market manipulation by Sam Bankman-Fried, shortly before the fall of the Terra ecosystem. Investigators are looking to determine if the shares of “SBF” participated in the collapse of the two cryptocurrencies LUNA and UST:
“[Cela a pu] creating a domino effect that ultimately caused his own cryptocurrency exchange to implode last month. »
Manhattan prosecutors are examining possible price manipulation that would have benefited the two companies created by Sam Bankman-Fried: FTX and Alameda Research. As a reminder, during the collapse of Terra, the UST stablecoin could not maintain parity with the dollar, due to too many sell orders. However, we now know that sales of UST came largely from Alameda Researchaccording to the New York Times:
“ The majority of sell orders for TerraUSD seem to have come from one place: Sam Bankman-Fried’s trading firm, which also placed a substantial bet on the eventual fall in LUNA’s price.»
The idea would have been to take advantage of an orchestrated fall of the LUNA, in order to profit from the business. But things didn’t turn out that way.
👉 To read – How to secure and store your cryptocurrencies?
Ledger Stax, designed for NFTs by the creator of the iPod
🔥 The world leader in crypto security
A bet that precipitates the collapse of FTX and Alameda?
The fall indeed did not stop, leading to the collapse of the entire Terra ecosystem. What would have precipitated the fall of FTX and Alameda Research, according to the source cited by the New York Times. The latter reports that Caroline Ellison, the CEO of Alameda, would have confirmed that the loans contracted by the firm would have found themselves inaccessible, which would have led it to use FTX client funds to bail out the coffers.
As a reminder, Sam Bankman-Fried confirmed that FTX allegedly misappropriated client funds to bail out Alameda. If it did indeed turn out to be related to the Terra case, the two biggest crypto scandals of the last few years would turn out to be related. It is in any case more and more obvious that SBF could not have ignored manipulations of such magnitude, despite his recent claims. The ex-CEO of FTX explained as follows:
“I was unaware of possible market manipulation, and I certainly never wanted to manipulate the markets.»
The revelations are linked however for Sam Bankman-Fried, FTX and Alameda Research. The malfeasance of the “golden boy” of cryptos seems to affect a wider field than was originally imagined. Where will the investigation end? No one can say at this stage.
👉 Going Deeper – Sam Bankman-Fried Reveals FTX Sold Non-Existing Assets to Clients
Join Experts and a Premium Community
PRO
Invest in your crypto knowledge for the next bullrun
Source: New York Times–Picture: FTX
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
2228 items
