Crypto villains Su Zhu and Do Kwon have called out fellow crypto Sam Bankman-Fried for market manipulation.
In the latest revelation in the SBF saga, the FTX founder is now being investigated by federal prosecutors for manipulating the market for TerraUSD and LUNA in spring. It is alleged that he manipulated the prices of the currencies to benefit FTX and Alameda Research.
The SEC and federal prosecutors have already been looking into whether FTX illegally transferred customer funds to Alameda. FTX is also under investigation for violating money laundering laws that require businesses to inform law enforcement about illegal activity.
In a statement, SBF said he was “not aware of any market manipulation and certainly never intended to engage in market manipulation.”
“To the best of my knowledge, all transactions were for investment or for hedging,” he added.
When LUNA crashed to $0 in May, the bulk of sell orders for TerraUSD allegedly came from FTX, which heavily bet on the currency falling. Ironically, the crash of LUNA led to contagion bringing down a slew of crypto giants including 3AC and ultimately FTX.
On Twitter, 3AC co-founder Su Zhu shared news about SBF’s latest investigation. “Federal prosecutors including DoJ investigating FTX/Alameda for orchestrating trades causing the UST depeg / Luna collapse,” he tweeted, sharing the New York Times article.
LUNA founder Do Kwon also shared the piece, writing, “I think the time has come for @GenesisTrading to reveal if they provided the $1B UST shortly before the crash to SBF or Alameda – the purchase from LFG was represented as stemming from “interest to participate in the Terra Defi ecosystem” – not to provide ammo for a peg attack.”
Do Kwon also questioned “Alameda borrowed 9 figures in bitcoin from Voyager (public bankruptcy filings) on depeg dates, and asked other large firms to borrow more (10 figs) – what this was used for needs to become public knowledge? (Short btc to handicap lfg reserves?)”
“This is fairly public knowledge at this point, but the large currency contraction that UST went through in Feb 2021 was started by Alameda, when they sold 500mm UST in minutes to drain its curve pools during the MIM crisis,” he continued. “What’s done in darkness will come to light.”
Whilst Su Zhu and Do Kwon aren’t exactly incorrect for calling out SBF for his egregious behaviour, the hypocrisy is remarkable.
Both Su Zhu and Do Kwon have been shady about their whereabouts following the collapse of their respective firms and coins. Neither are yet to be held fully accountable for their crimes and have taken an uncooperative and evasive stance with law enforcement. Pointing fingers at SBF is nothing more than a weak attempt at deflecting attention.