As US prosecutors reportedly investigate whether FTX and Alameda orchestrated LUNA and UST's collapse, a look at the timeline of events and potential evidence
this will be yet another media show to benefit SBF. Crime pays. https://twitter.com/... @bigcheds : The golly gee sheepish act is so offensive - “But as the committee still thinks it would be useful, I am willing to testify on the 13th.” Pretending like he was the janitor or something and is surprised anyone would want to talk to him. https://twitter.com/... @lawmaster : @tier10k The DC tweet LOL “My honest advice: stop doing everything,” Mr. Zhao said. “Put on a suit, and go back to DC, and start to answer questions.” Zhu Su / @zhusu : How would you know? Thought you claimed you arent aware of what happens at Alameda? Its OK we can let DoJ decide https://twitter.com/... @hsakatrades : @tier10k “My honest advice: stop doing everything,” Mr. Zhao said. “Put on a suit, and go back to DC, and start to answer questions.” The tweet that started it all. https://twitter.com/... Anna Irrera / @annairrera : The downfall of crypto maven Sam Bankman-Fried is prompting a re-examination of the implosion of the Terra stablecoin ecosystem that erased $40 billion in market value https://www.bloomberg.com/... via @business Emily Nicolle / @emilyjnicolle : these are the trades that made UST and Luna collapse in May. after FTX's bankruptcy, people are again asking the question: who was behind them? https://www.bloomberg.com/... @fullbeerbottle : Sam out here like “I made a lot of big mistakes this year. 1. The shoelace thing. Sorry about that 2. I didn't fix the browser issues quickly enough 3. Accidentally ate 3000 shrimp, sorry. 4. Some other minor stuff.” https://twitter.com/... Andrew Kang / @rewkang : Many ex FTX/Alameda employees have mentioned that FTX employees would inappropriately snoop into large accounts and check their positions We were being counter-traded by both Alameda and FTX employees Lying about it = more prison time https://twitter.com/... @cryptocred : @HsakaTrades @CryptoDonAlt Schrödinger's Alameda Research - SBF Edition I know no details about the activities of Alameda Research except the details that preclude any illegal activities at Alameda Research @cz_binance : 5/ Unlike @kevinolearytv we continue to do due diligence even after we make an investment. As an early investor in FTX, we became increasingly uncomfortable with Alameda/SBF and initiated the exit process more than 1.5 years ago. @hsakatrades : @CryptoDonAlt Agreed. Should have lead their public reemergence with some acknowledgement of their wrongdoing and showing a shred of remorse (however fake). Then lead into talking about all the shit Alameda/FTX allegedly pulled. Failing to do the former just undermines the latter. DonAlt / @cryptodonalt : @HsakaTrades Honestly think Su and Kyle had a way to redeem themselves but this absolute garbage really isn't it Take responsibility and show humility instead of crying “it was the exchanges fault” like every 10yo trading on 100x leverage @zhusu : It is sad given how long cryptosociety and media let his charade go on that many ppl's suffering coincides with our catalyst for vindication Yet life is as winding as it is windy, beauty is truth and truth is beauty - - that is all ye know on earth and all ye need to know @tree_of_alpha : Having those two crypto cancers throw shade at each other on a public social network instead of being on the run from authorities is max pain scenario. https://twitter.com/...
Context & Ripple Effects
This timeline piece builds on the New York Times' report a day earlier that US prosecutors are examining whether Sam Bankman-Fried manipulated TerraUSD and LUNA markets before their May 2022 collapse — extending an inquiry that began with the SEC and CFTC's November probe into FTX.com's handling of customer funds. The alleged mechanism matters as much as the accusation: former FTX and Alameda employees say staff monitored large accounts and ran counter-trading against them, which is exactly the conduct a LUNA-manipulation theory would require.
The piece lands mid-cascade. Within two weeks of publication, Caroline Ellison's plea hearing transcript had her admitting she and Bankman-Fried knowingly misled investors, lenders, and customers about Alameda's borrowing from FTX — cooperation that gives prosecutors a cooperating witness positioned to speak to exactly these trading practices.
First-order effects
- Bankman-Fried faces a widening multi-agency docket — DoJ, SEC, and CFTC all active — where the LUNA/UST question converts him from failed exchange operator into suspected market manipulator, a categorically more serious charge track.
- Caroline Ellison's admitted misconduct in the plea transcript makes her the prosecution's key instrument on this front; every new allegation she can corroborate strengthens the government's hand while narrowing her own exposure.
Second-order effects
- Other exchanges with affiliated trading arms now face the same scrutiny template: if prosecutors establish that FTX surveilled customer positions and counter-traded through Alameda, regulators will ask every vertically integrated venue whether it does the same.
- The Terra ecosystem's creditors and UST holders gain a potential liable party beyond Terraform Labs itself, reshaping who pays for the May 2022 unwind and reviving claims that had assumed algorithmic failure was the whole story.
Third-order effects
- If the pattern holds — exchange collapses followed by prosecutors reaching back into prior market events — the industry moves toward forced separation of trading venues from proprietary trading desks, the structural firewall traditional finance has long imposed.
- Each confirmed manipulation allegation deepens the legitimacy gap between crypto markets and regulated venues, accelerating the migration of trading activity toward institutions that accept surveillance and audit as the price of operating.
The trend: Prosecutors are treating crypto exchange failures not as isolated insolvencies but as threads to pull backward through prior market events, steadily converting exchange founders into defendants and pushing the industry toward separated, audited market structures.