Prosecutors are investigating whether ftx founder sam bankman-fried manipulated the market price of terrausd and luna earlier this year. the probe is looking into the possibility that bankman-fried steered the prices of terrausd and luna to benefit entities he controlled. terrausd is an algorithmic stablecoin designed to maintain its peg to the u.s. dollar through an arbitrage network. an unnamed source said ftx placed a torrent of sell orders for terrausd at the same time they had shorted the price of luna.
Investigation into bankman-fried’s potential involvement with terraluna began in may of this year. the collapse of terrausd and luna eventually led to the catastrophic failure of ftx, and the legal battle between the united states and the bahamian government is currently underway to determine which country has jurisdiction over the case of ftx. bankman-fried has been urged to attend a house financial services committee hearing on december 13, 2022, and a senate banking committee hearing the next day, though it is still unclear if he plans to attend either hearing.
Had shorted the price of luna, in an apparent attempt to yield “a fat profit.” terraform labs flooded the market with luna tokens to prop up the 1:1 ust-to-dollar peg, but the bottom fell out of the entire terrausd-luna ecosystem. ftx and its founder have come under increasing scrutiny from regulators and officials worldwide, and the investigation into bankman-fried’s potential involvement with terraluna is in its early stages. it is still unclear why bankman-fried would have manipulated the market prices, but it is possible he was attempting to benefit entities he controlled.
