The biggest casualty of the crypto bear market is the historical collapse of Terraform Labs. The stablecoin of the project UST lost its peg to the USD and crashed, taking down the LUNA token to near zero in a matter of a few hours. Thus far, there are different theories about the de-pegging event. A report by Arcane Research suggested that the Terra classic crash was a ploy pump and dump plot.
Involvement of US Government
However, some investors believe that the peg breaking was a planned tactic by the US government officials that involved Wall Street whales who induced the crash with massive sell-offs. It is worth noting that Do Kwon, the founder of Terra Chain, has a history of insubordination with the Securities and Exchange Commission of the United States. However, new evidence has surfaced claiming once again that the UST crash was an inside job.
A new report on the matter of Terra classic chain decommissioning has been issued by Uppsala Security and CoinDesk Seoul branch. The analysts that composed the report have presented the theory that UST de-pegging was not caused by the invasive movement of Wall Street investors.
The report also presents some evidence to claim that the behavior of the wallets and the internal validators that were operating the funds at Terra classic was rather suspicious. The report also uses the movement report of internal Terraform digital wallet addresses to claim that the UST de-peg event was a strategic and well-planned move by insiders at Terraform Labs.
Mystery of UST Crash
The researchers at CoinDesk Korea and Uppsala security have identified a digital wallet address that has been classified as the attacker address by several investigators. The report informs that the suspicious address was on the Ethereum blockchain. The report also highlights that on the same date, one attempt at de-pegging UST failed.
Following the event, Terraform Labs took out around 150 million UST tokens using the curve. Kwon claims that the massive withdrawal was made to maintain the liquidity of the stablecoin. The same wallet exchanged USDC token on Coinbase for UST.
The de-pegging event followed shortly, in addition to the outflow of UST tokens across various exchanges. There are also some theories that the attacker’s wallet belongs to a Wall Street firm that was planning to slay Terra.