Bankman-Fried rejects claims that Alameda crashed luna to sink 3AC 

In the wake of FTX’s demise, there’s been an awful lot of mudslinging — particularly between the exchange’s former CEO Sam Bankman-Fried and the founders of collapsed crypto hedge fund Three Arrows Capital.

One of the biggest claims is that crypto trading firm Alameda Research — the sister firm to FTX — deliberately crashed the cryptocurrency luna and its sister token TerraUSD in order to bring down Three Arrows Capital (3AC). It’s an allegation that has sparked a market manipulation inquiry by U.S. prosecutors.

You “have to be afraid of highly conflicted industry players working to destroy your assets,” 3AC co-founder Su Zhu tweeted on Thursday, as part of a thread mooting that “Alameda/FTX + affiliated parties used their clients’ assets and positions to orchestrate an elaborate attack” on luna.

Zhu’s criticism was joined by Terraform Labs CEO Do Kwon, the creator of luna and TerraUSD. Kwon said that Genesis Trading — crypto’s largest prime brokerage that is facing its own liquidity crisis — purchased $1 billion of TerraUSD shortly before the crash, claiming that it wanted to participate in the Terra DeFi ecosystem. He asked openly whether these funds were provided to Alameda or Bankman-Fried in order to attack the token.

3AC’s other co-founder, Kyle Davies, echoed this claim on a podcast with AnalyseAsia this week. He said that the funds handed to Genesis were given out to a market making firm that immediately sold the tokens in order to drop the price.

“I made a lot of big mistakes this year. But this wasn’t one of them. There’s no evidence, because it didn’t happen. Please, please, focus on your own house,” Bankman-Fried said on Twitter on Friday, in response to a separate tweet thread from Zhu.

FTX bankruptcy

FTX filed for Chapter 11 bankruptcy on Nov. 11, with Chicago-based attorney John Ray taking over Bankman-Fried’s role as CEO. There’s currently a tussle between the U.S. and the Bahamas over the jurisdiction of the bankruptcy proceedings.

When Bankman-Fried responded to the allegations from Kwon and 3AC’s founders, Zhu questioned how SBF was able to know so much about Alameda’s trades — when he had publicly stated that he deliberately kept a distance from the firm.

Separately, the former FTX executive said on Friday he’s willing to give evidence on the exchange’s collapse to a U.S. congressional committee next week.

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