FBI Opens NFT Insider Trading Case And Binance CEO Reflects On Terra’s Implosion

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Last Updated on 3 June 2022 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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OpenSea was until a few months a thriving business and the world’s biggest NFT marketplace. Now they are the subject of an active FBI investigation after an ex-manager of the company was accused of insider trading. Beware of who handles your NFTs we can only say.

Furthermore, although stocks like Meta, Netflix and even Tesla have by now fallen by similar percentage points as Bitcoin and Ethereum in 2022, you can be sure that during the slow news summer months, the mainstream media will want to write about the ‘2022 crypto crash’ (although the year will only be halfway by then).

The price of bitcoin is down 44% over the last six months, to range in between $39,000 and $31,000. Peer cryptos and smaller altcoins fared worse even.

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Villain title

In previous years and during previous pullbacks, the role of villain would probably have gone to Mark Karpeles of the infamous Mount Gox or to Gerald Cotten of QuadrigaCX (whom Netflix made an interesting documentary about), but this time round, as crypto reached unseen levels of public exposure in 2021 and 2022, the villain title in this whole story has to go to Do Kwon.

Do Kwon formed Terralabs, whose $68 billion luna/terraUSD stablecoin pair imploded in early April, taking the rest of the cryptoworld down in scandal with it. When it was later revealed that this wasn’t the first failed stablecoin project (called Basis Cash) of the 30-year-old crypto founder, many were surprised and said that some of the exchanges which had allowed Terra to be traded should take part of the blame.

Now, speaking to Fortune, Changpeng Zhao, CEO of Binance, is one of the first major leaders in the cryptosphere to reflect on what happened so far this year with Terra. He explained that:

I think overall, the whole situation is a disaster. It’s not good for anybody. It hurt a lot of users. A lot of value disappeared. I believe, fundamentally, there were design mistakes in the design of UST, Terra, etcetera.

Going more into detail as to the crash of Terra, CZ stated:

There was also operational mistakes. The [Terraform Labs] team didn’t respond quickly enough. They didn’t use their reserves to restore pegging when the peg was only a little bit deviated. And then only after it crashed [losing around] $80 billion, they tried to use the reserve of $3 billion trying to recover that. Of course, it doesn’t work.