Nansen Theorizes That Seven Wallets Within Terra Triggered UST Depeg as South Korea Prosecutors Investigate Terra
Nansen Theorizes That Seven Wallets Within Terra Triggered UST Depeg as South Korea Prosecutors Investigate Terra. In the aftermath of a hack, many customers are wondering how to handle their trading account and what they should do to recover that money now. Experts say they’re more likely than not going to have trouble getting any kind of refund from the exchange because cryptos don’t provide access for legal disputes or government intervention like banks can in traditional financial systems.,
Nansen Theorizes That Seven Wallets Within Terra Triggered UST Depeg as South Korea Prosecutors Investigate Terra. Nansen believes that the seven wallets within Terra triggered a U.S. Treasury Department delisting of the coin, which is now being investigated by prosecutors in South Korea.
Last month, the greatest story in the cryptocurrency world was Terra’s demise. Terraform Labs’ invention was brought to its knees once the market value of its original assets plummeted. An ecosystem with a market value of almost $40 billion has just collapsed!
Authorities all across the globe have expressed worry about the stability of stablecoin projects in reaction to this fallout, none more so than in South Korea, where Terraform Labs’ creator Do Kwon is from. The East Asian country has launched an investigation into the circumstances behind the alleged breakdown.
Terraform Labs is dealing with domestic legal questions with the UST fiasco.
According to a report by JTBC, Seoul’s Southern District Prosecutor’s Office issued subpoenas and launched an investigation against Terraform Labs personnel. The bureau is planning a “full-scale inquiry,” led by the Joint Financial and Securities Crime Investigation team. According to one firm employee aware with the situation, the investigators are interrogating TFL personnel dating back to the early days of Terra’s creation.
Ignorance on purpose?
It’s now been revealed that Do Kwon may have purposefully disregarded warnings that TerraUSD’s algorithmic design wasn’t failsafe and that the currency was at danger of losing its peg. According to one employee, the CEO was warned before the launch that UST may collapse at any moment, yet he went through with it nonetheless.
Investigators are also looking into whether TFL followed all of the proper procedures while listing TerraUSD and the network’s native LUNC, or LUNA token, at the time. The investigation also looks at whether TFL staff were involved in a price-fixing plan that led to Terra’s demise.
The Korean government is now under pressure to safeguard investors in one of the world’s most active crypto economies. The National Assembly’s Political Affairs Committee has allegedly summoned Kwon, along with the committee’s delegate Yoon Chang-Hyeon, to face concerns about the country’s ongoing crypto investment losses.
This urgency to act on Terra arises from the fact that South Korean investors were among the most hit by the $40 billion financial meltdown. Hashed, a venture capital company, has lost up to $3.5 billion, joining the ranks of numerous other young investors who have dabbled in the embryonic world of cryptocurrency.
The government has subsequently formed a financial regulatory panel and is examining TFL’s tax compliance via the IRS, in addition to the investigation against TFL workers. Investors are threatening to sue Terra’s creator and his company, and class-action lawsuits are in the works.
So far, JTBC has discovered that 76 victims have filed complaints with the Prosecutor’s Office, totaling 6.7 billion won in damages.
Even with the newly elected pro-crypto president Yoon Suk-yeol, the path back to a healthy relationship between crypto and the government may become substantially more difficult in the future.
Terra’s depreciation has offered a cause of contention for politicians and investors that oppose cryptocurrencies in the United States. However, rather than an outright ban on this industry, most requests have been for regulation (of stablecoins and crypto). Some government institutions, including as the Treasury Department, the Commodity Futures Trading Commission, and the Securities and Exchange Commission, are advocating for “very suitable” crypto regulation.
The action of seven wallets inside Terra prompted the UST depeg, according to the Nansen investigation.
In other news, a research prepared by blockchain analytics platform Nansen claims that the UST meltdown was likely caused by seven well-funded wallets. The wallets made UST withdrawals through the lending system Anchor and converted them to Ethereum via Wormhole, according to the study. These massive amounts of UST were subsequently exchanged for other stablecoins.
The wallet owners took advantage of arbitraging inefficiencies between Curve — the liquidity pool that holds the other stablecoins – and decentralized and centralized exchanges, according to the Nansen team. Among centralized exchanges, Binance was the preferred option. Based on their research, the analytics company found that the debug could not have been caused by a single attacker.