Federal US prosecutors are reportedly looking into the potential link between former FTX CEO Sam Bankman-Fried’s fallen crypto empire and the downfall of stablecoin issuer Terra (LUNA).
According to a new report by the New York Times, a large chunk of stablecoin TerraUSD’s (UST) sell orders at the time of its collapse appear to have come from Bankman-Fried’s trading firm Alameda Research, which had also placed a bet against LUNA.
The report says that the prosecutors are looking for potential evidence of market manipulation, where Bankman-Fried could have illicitly influenced the prices of UST and LUNA.
In May, UST, which was designed to keep its peg to the US dollar through a mechanism that caused the supply of LUNA to go up whenever its price dipped, collapsed and decreased the price of the algorithmic stablecoin to well below $1, dragging Terra and LUNA down with it.
UST and LUNA never recovered. Several crypto companies, including digital asset lending platforms Voyager Digita
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