Jump Crypto confirms that large wallets are driving the peer crash

A number of large investors in the Terra (LUNA) ecosystem left their positions as stablecoin TerraUSD (UST) began to slide away from its parity last month, and smaller investors continued to buy while the token price fell, according to the company’s cryptocurrency Jump Trading Group, Hop Crypto.

Source: AdobeStock / gritsalak

Jump Crypto released a post-mortem document on the events surrounding the loss of Terra’s stackecoin stick, in which it discussed the results of the blockchain analysis firm Nansenespecially with regard to the critical role of “seven” wallets (including one attached to Celsius networkCEL).

The authors of the report wrote:

“These seven players are behind withdrawal operations that quickly spread to other major wallets.”

The newspaper also looked at the role played by Anchor, the Terra-based platform for savings, lending and lending. The authors of the document, Nihar Shah and Maher-Latif, noted that some major UST depositors appear to have left their positions at Anchor in the early days of May, while some smaller players increased their purchases between 7.-9. May. On Twitter, the company has added :

“Withdrawals at Anchor – especially at night on May 7 and in the morning and early afternoon of May 9 – put considerable pressure on UST parity. Large depositors were disproportionately behind these outflows. And small depositors increased their exposure during this episode. “

Researchers attributed the occurrence of the crash to “a combination of transactions in the UST / 3CRV pool over a seventy-five minute window” on May 7th.

They added that trades involving “withdrawal of UST liquidity” and “two wallets placing large UST sales orders” had “upset the balance and depth of the pool.”

Larger depositors were able to quickly liquidate nearly 15% of their UST positions in Anchor when parity began to slide on May 6, the report said, at a time when holders of portfolios with less than $ 10,000 in Anchor bought more.

According to researchers,

“Their overall position size was an order of magnitude smaller than the size of medium and large depositors, so this increased exposure was not enough to counter the outflow.”

In the case of medium-sized depositors, with “portfolios of $ 10,000 to $ 1 million in deposits,” “the protocol left on May 6, losing 5% of their position immediately and 30% in the first three days.”

In addition, the firm said it did not believe that a “relatively inactive” portfolio, which reduced its UST position by about $ 85 million in a number of trades, was linked to a professional trading body – and claimed that his transaction history did not show that that was the case.

The authors argued that the actions of this portfolio holder may have served as a catalyst for the collapse.

Jumps CEO, Kanav Kariya, is a board member of Terra. But the report does not mention Kariya or Jump’s ties to the blockchain protocol.

Continuation of legal issues

Meanwhile, the company behind Terra, Terraform Labs, is the subject of several lawsuits in South Korea. Although the company was founded in Singapore, its founders are both South Koreans and residents of South Korea. Many experts and journalists claim that the company’s center of gravity remains in Seoul.

According to Yonhap, a lawyer representing the law firm Daegun went to the Seoul Southern District Prosecutor’s Office to lodge complaints against the CEO of Terraform, Make Kwonand its co-founder, Shin Hyun-seong. The company accuses the duo of fraud as well as violating several laws (includingAct on increased punishment, etc. of specific economic crime).

The lawyer explained that his firm represented 12 investors and that the total amount of damages was more than $ 800,000.

Another complaint has already been filed – with similar allegations – by the law firm LKB & Partnerswhile Cryptonews.com has become aware of information that suggests that other cases could also be ongoing: groups of small investors meet on platforms such as Naver Cafe and Cocoa snack‘s OpenChat before seeking legal advice.

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