Federal prosecutors began investigating FTX CEO’s involvement in market manipulation that led to LUNA and TerraUSD’s devaluation.
New York’s prosecutors opened an investigation into probable market manipulation by FTX and Alameda Research that led to the depreciation of key assets in the Terra ecosystem. The New York Times reported this, citing its own sources.
According to the newspaper, investigators have recently begun examining the market activity of Sam Bankman-Fried’s structures. No actual violations have been uncovered so far. However, prosecutors assume that SBF put deliberate pressure on LUNA and TerraUSD’s quotes through his companies, as a result of which both assets depreciated.
One of The New York Times’ unnamed sources noted that just before the Terra ecosystem collapsed, representatives of crypto currency exchanges and individuals saw a large flow of orders to sell UST. The orders had a small denomination, but their large number overloaded the system and helped unpeg UST’s price from the dollar. The bulk of the orders came from accounts affiliated with FTX.
In addition, NYT sources point out that another investigation of FTX is underway by U.S. law enforcement. The platform is suspected of violating the U.S. legislation on money laundering. Earlier, it became known about a number of other ongoing investigations against SBF and its affiliates.
Rumors about a connection between the Terra crash and the actions of Alameda Research emerged almost immediately after the May events. Similarly, rumors link FTX’s collapse and Binance’s actions, which among others suffered from the May developments.
