Some are still in disbelief, was there an attack behind the biggest crypto crash ever?
No matter how miserable your day is, on Wednesday, remember the LUNA investors. The stablecoin TerraUSD (UST) plummeted 75% below its targeted dollar parity, while Kwon’s creation LUNA plunged over 97% from highs. At one point, LUNA was more affordable than UST.
The failures of the coins have actual repercussions. Suicide hotlines have been pinned on the r/Terraluna subreddit. As the LUNA problem develops, the subreddit is unsettling to read.
What caused it, then? How did one of crypto’s largest catastrophes occur in an environment run by such a haughty personality?
It has changed from what was initially thought to be a FUD (fear, uncertainty, and doubt) attack on Luna to something far more nefarious and sneaky. A George Soros-inspired assault on the Terra environment, in which the buyer got off with more than $800 million, is one of the most generally recognized allegations.
The hack received widespread media coverage, with US Treasury Secretary Janet Yellen bringing up algorithmic stablecoins and underlining the risk they pose during a Senate Banking Committee meeting on Tuesday. Frances Coppola, an economist, agreed that the UST disaster constituted an assault.
The idea that American market maker Citadel might be responsible for the attack was floated by Ran NeuNer, host of CNBC’s Crypto Trader and a close friend of Kwon. The CEO of IOHK, Charles Hoskinson, also stated that Citadel may be the suspect.
Although billionaire Ken Griffin, the founder of Citadel Securities, has made clear how he feels about the cryptocurrency market, comparing the trillion-dollar market to abstract painting, the idea that Citadel will attack UST is still just conjecture. Naturally, Crypto Twitter accused Neuner of attempting to defend his valuable but quickly dissipating LUNA bags.
Crypto expert Larry Cermack claimed that more than $1 billion is on its way to support and put out the Luna Foundation Guard wildfire. Cermack said that companies including Celsius, Jump, and Alameda will provide venture cash.
Regardless of theories, the UST car crash was a) predictable and b) one of the most notable crypto deaths in history for many observers, researchers, and believers in the field.
The collapse of LUNA is by a factor of 16 the largest Ponzi death spiral in the history of cryptocurrency, according to Tree of Alpha, the white-hat hacker who found a critical vulnerability in the Coinbase API. A similar prediction was made by Nic Carter of Castle Ventures, who called it the biggest fall in the history of the cryptocurrency industry.
Tree of Alpha linked LUNA to the proven Ponzi scheme Bitconnect, a $2.4 billion fraud case starring highly acclaimed leader Carlos Matos that will live in crypto history.
BitKwonnect was immediately meme into existence by Cory Klippsten, CEO of Swan Bitcoin, who has been pounding the Bitcoin maximalist drum (i.e., avoid shitcoins at all costs) since the launch of UST.
UST’s potential problems had also previously been mentioned by Lyn Alden, who is ranked 100 on Cointelegraph’s Top 100. Alden explained the associated selling pressure for Bitcoin in an investor letter, describing how the collapse of the UST peg will cause a massive influx of coins into the market. She was accurate in saying that everything would happen in the last 48 hours.