Do Kwon Says Terra’s Collapse Probably Had an Insider
In an interview, Do Kwon relived the darkest 6 days of May when Luna fell from $80 to less than $1 and triggered a massive sell-off across the crypto market.
The fall of the fourth largest cryptocurrency began with an unannounced transfer of funds between trading pools on the night of May 7. It left the Curve pool with an imbalance on the side of Luna. This anomaly could have been set right as it’s not an entirely uncommon phenomenon.
But in this case, the situation turned from bad to worse, writing off one of the most infamous network collapses in crypto history. In an interview, Do Kwon admitted that he believes there was a mole inside this team and the crucial blow to the network came from an insider.
Within 13 minutes of the liquidity imbalance, some unknown traders sold off $200 million of UST. The trend continued through the next morning, which left the trading pool with a lingering imbalance and UST value wobbling from $1 to 99 cents. The UST had lost its peg to the dollar, although the margin was not significant.
Luna May Mayhem
“The sentiment on Twitter started to get worse… And then there started to be more people that were trading against the Curve pools,” Kwon recalls his morning after the big trade that exposed the liquidity crunch at the Terra Luna ecosystem.
In a knee-jerk reaction, Kwon, who goes by the Twitter handle @stablekwon, infamously tweeted, “Anon, you could listen to [Crypto Twitter] influensooors about UST depegging for the 69th time. Or you could remember they’re all now poor, and go for a run instead.”
Kwon felt helpless at containing the attack as his executive team was up in the air flying to Singapore to attend a quarterly meeting at Terraform’s headquarters. Kwon admitted that the timing of the fund transfer and the absence of key Terra executives due to a scheduled official engagement was inside information.
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