Terra Whales Allegedly Dumped UST As Soon As It Began To Crash

While Terra whales were abandoning their positions in the algorithmic stablecoin, retail investors continued to buy, according to a study provided by Jump Crypto on the crash of TerraUSD (UST).

Jump Crypto, Jump Capital’s cryptocurrency subsidiary, was a key backer of the Terra blockchain, which has since crashed. The paper is the company’s first public remark since the blockchain’s demise.

The firm claimed that their research is based on publicly available blockchain transactions, which demonstrate that some significant investors with UST holdings of over $1 million liquidated their positions extremely early in the depeg, leaving retail investors with worthless tokens.

Between May 6 and May 9, retail investors with less than $10,000 in UST boosted their exposure. However, on May 6, when UST first lost its peg, significant depositors cut their UST stake in Terra’s Anchor protocol by about 15%.

Small investors’ increased exposure, however, was insufficient to stem the outflow because “their total position size was an order-of-magnitude smaller than that of mid-sized and big depositors,” according to the research.

According to Seven Wallets, this was “part of a bigger pattern”

Nansen, a blockchain analytics platform, had previously published a research that was mentioned in the report. According to Nansen, the Terra blockchain’s demise may be traced back to seven wallets, one of which is linked to cryptocurrency lender Celsius.

The seven wallets mentioned by Nansen were “part of a much bigger trend” that pushed outflows in Anchor around the start of the UST de-peg, according to Jump Crypto.

After lowering its UST holdings by about $85 million on May 7, one wallet was essential to the crash. Many people feel that the wallet set off a chain of events that eventually led to the network’s demise.

Many people believe the wallet belongs to a crypto trading firm, and there has been conjecture about who is behind it. However, based on its history, the wallet is unlikely to be linked to a trading firm, according to the research.

The role of the Luna Foundation Guard (LFG) -Terra in the collapse is not mentioned in the study

Kanav Kariya, the president of Jump Trading, is a member of the foundation’s governing council. LFG attempted to stabilize the UST peg by selling its bitcoin holdings, but it was too late to save the ecosystem.

Last month’s collapse of Terra blockchain wiped out about $40 billion from the industry, which was worsened by the broader crypto market sell-off. Since then, regulators all across the world have escalated their investigation of Terraform and the cryptocurrency business in general.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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