It’s been nine months since the Terra crypto project (LUNA) experienced a catastrophic collapse in May 2022. In just one week, Terra’s algorithmic stablecoin, UST, was unable to maintain its exchange rate at the level of the US dollar. As a result, the price of both the UST and the LUNA experienced a sharp decline, with the UST losing around 99% of its value. It is speculated that multiple factors contributed to the huge cryptocurrency crash as $60 billion was wiped from the cryptocurrency space.
The secret of “Wallet A”
In the aftermath of the LUNA crisis, numerous autopsies were performed, with a certain “Wallet A” being the prime suspect; shown to have played a significant role in the UST de-pegging event.
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According to Igor Igamberdiev, head of research at Wintermute, “Wallet A” converted 85 million UST to USDC, which created an imbalance in the pool of the UST/3CRV curve, which ultimately led to the collapse of the Terra Ecosystem (LUNA). Going his teststhere is a strong possibility that the wallet linked to last year’s UST depeg may belong to the trading company Jane Street Group.
Igamberdiev’s examination of the wallet’s transactions reveals that there is a “high probability” that the wallet is linked to Jane Street. On May 3 of the previous year, Clearpool announced that Jane Street had borrowed $25 million from BlockTower using the permitted lending pool. From this information, Igor was able to identify three addresses belonging to a trading company; one of these addresses, named Wallet A, was of great importance.
Multiple wallets, same owner?
Two weeks later, the same wallet took a second loan of $25 million before transferring the funds to a Coinbase hot wallet. However, Igamberdiev mentioned that the Coinbase wallet was credited with USDC 84.5 million by the UST de-pegger before receiving the loan amount. Moreover, surprisingly, Igor found that the wallet had no other interactions other than these deposits; which clearly indicates that the wallet could belong to the same entity.
Before receiving $25m from Jane Street, this Coinbase wallet received $84.5m from UST depegger after fatal exchange
This wallet has had no interactions other than the two deposits mentioned
Therefore, there is a high probability that they belong to the same entity pic.twitter.com/vOz934hlzm
— Igor Igamberdiev (@FrankResearcher) February 28, 2023
In addition, Igor noted that the wallet – purportedly belonging to Jane Street – held the UST on LUNA’s profitable Dapp “Anchor” for a month, which did not necessarily indicate nefarious intent by the entity. At the time of writing, Jane Street has yet to respond to any of these allegations. However, the cryptocurrency crash, which was precipitated by the LUNA debacle, ushered in a year of cascading financial disasters that have yet to be mitigated.
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The content presented may contain the personal opinion of the author and is subject to market conditions. Before you invest in cryptocurrencies, do some market research. Neither the author nor the publication accepts any liability for personal financial losses.