Fall of TerraUST started a domino effect which led to a downturn in the market and caused some companies to file for bankruptcy. Voyager, Celsius and Three Arrows Capital (3AC) became one of the leading organizations in the list. Do Kwon, Terraform co-founder, had to face legal consequences from the authorities due to suspicions over his alleged involvement in the event. In the recent news, Albright Capital had dropped the lawsuit against him and the company.
The filed lawsuit had allegations of the company violating Racketeering Influenced Corrupt Organization (RICO) Act and Terra UST functioning as a “ponzi scheme”. Su Zhu, 3AC co-founder, took the issued document to Twitter. He previously claimed that his company went bankrupt due to the LUNA collapse.
Year 2022 was a nightmare for the crypto industry as it saw the fall of the aforementioned stablecoin project. FTX collapse came in kind of a boost to the crypto winter. According to an announcement, the original project was rebranded as Terra Classic while the new chain adopted the name Terra.
In May 2022 the stablecoin protocol started witnessing large UST dumps on their lending protocols Curve and Anchor. The latter saw a sugged fall in deposits from $14 Billion to $9 Billion, causing ANC, native crypto asset of the protocol, to fall by around 35% in just 24 hours. This led LUNA to fall to nearly 10 cents which ultimately forced the company to halt the blockchain on block 7603700 for the initial time in their history.
FTX crypto exchange became prey of its own native token, FTT. One of the largest institutional holders of the crypto assets announced that they will dump their asset holdings in the market. The news created panic in the sector causing the investors to flee from the space. Sequoia Capital reported that their FTT holdings worth $210 Million has shrunk to $0.
Interestingly, Alameda Research held a large chunk of the token which eventually led the company’s value to contract massively. FTX Group filed for bankruptcy on November 11 2022 and Sam Bankman-Fried stepped down as the CEO. Exactly a month later, he was arrested in the Bahamas on a request from the US government.
Cryptocurrency market is struggling to get back on track. Experts have mixed reviews over the industry. An American stock broker, Peter Schiff says that this is crypto extinction. Carol Anderson, a Sussex University professor who predicted Bitcoin will plunge $10,000, says that it can rise to $50,000.
Laith Khalaf of AJ Bell says he won’t be surprised by extreme price momentums as this industry is heavily driven by market sentiment.
Source: https://www.thecoinrepublic.com/2023/01/11/albright-capital-steps-back-in-case-against-terraform-labs/