An Algorithmic Error Or A Pump And Dump? New Report On Terra Raises Serious Questions

Zinger Key Points
  • A new report finds the exit of liquidity before the crash may have been pre-determined.
  • The report compares the Terra ecosystem to "a sinking cruise ship."

Recent data indicates that three thousand primary wallets, with multiple links to Terraform Labs, saw an outflow of over $6 billion prior to the de-peg of TerraUSD UST/USD. This strategic exit prior to the extreme loss faced by retail investors brings numerous ethical and legal concerns to Terraform Labs.

What Happened: A report by Arcane Research released this past week indicates that a concentrated number of wallets had an efflux of $6 billion of Luna LUNA/USD while tens of thousands of retail investor wallets accumulated the same amount. These findings indicate that Do Kwon and Terraform Labs may have calculated an exit in order to secure liquidity.

The report compares the Terra ecosystem to "a sinking cruise ship, the captain and distinguished guests fled in superyachts, leaving most passengers behind without lifeboats."

Also Read: Do Kwon Said To Be Working On Another Decentralized Stablecoin For Terra 2.0

Why It's Important: The crash of Terra’s token Luna was detrimental to institutional and retail investors globally, causing steep losses of over $60 billion. In past weeks, investors and media have demanded accountability from Terraform Labs and Kwon. The report indicating the exit of liquidity suggests that this crash may have been pre-determined for personal gains.

What's Next: As legal teams and public media in South Korea and around the world seek answers, such findings further jeopardize the future of Terraform Labs and Kwon. Early Luna holders and founders not being affected by the crash, at the magnitude of global investors, further highlights the urgency and cruciality of accountability.

Posted In: Do KwonLunaTerraform LabsCryptocurrencyNewsMarkets

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.