SBF Denies He Attempted to Make USDT & UST Lose Their Pegs to the Dollar
Former FTX CEO Sam Bankman-Fried has ignored several allegations since stepping down from his position. However, he came out on Friday to deny claims that he targeted Tether and Terra stablecoins. On his Twitter account, Bankman-Fried acknowledged making many mistakes this year, but he says this allegation was not one of them.
The Bankman-Fried statement was a reply to a tweet from Su Zhu, the co-founder of the fallen crypto hedge fund Three Arrows Capital. Zhu posted reasons why he and Do Kwon, the TerraForm Labs co-founder, have become very outspoken since FTX’s downfall at the beginning of November.
FTX’s collapse started when it came to public knowledge that its sister company, Alameda Research, had billions of illiquid FTX Tokens on its balance sheet. Binance made its last attempts to consider acquiring the crypto exchange but later backed out, citing that FTX was beyond its ability to help. FTX proceeded to file for bankruptcy three days later.
Three Arrows Capital Blames Former FTX CEO for Its Collapse
Today, former competitors, including Three Arrows Capital, have begun implicating Bankman-Fried in their downfalls. Zhu says his company got targeted since his interview with Bloomberg. He adds that other major players in the crypto market attempted to force a liquidation on Three Arrow Capital’s TerraUSD(UST) position.
UST lost its peg with the U.S. dollar back in May and wiped out over $40 billion in value. Zhu did not say in July that he believed Bankman-Fried was involved in causing Terra to collapse, which saw Three Arrow Capital lose $200 million on UST. He claims his advisors thought it would be “deflecting” at that time.
Binance CEO Says Former FTX CEO Attempted to Manipulate Markets
Zhu is not the only one who believes Bankman-Fried may have manipulated markets. Binance CEO Changpeng Zhao also claims that the former FTX CEO made attempts to Manipulate markets to force Tether(USDT) to lose its peg with the U.S. dollar. Zhao’s allegations came just after Binance had backed out of the deal to acquire FTX.
Since last year, Tether has sought to eliminate commercial paper from its treasury after Evergrande, a Chinese real estate developer, was at risk of being unable to repay over $250 million worth of debt. The incident raised fear around the corporate paper, which accounted for 50% of Tether’s reserves at that time.
Tether leadership later announced that none of its commercial paper was connected to Evergrande’s debt and had eliminated it. According to Zhao, the lingering suspicions around Tether could have made it a target for Bankman-Fried to manipulate.
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