New research suggests that there’s a “good chance” Terra’s collapse was largely triggered by quant trading firm Jane Street.
Igor Igamberdiev, head of research at crypto market maker Wintermute, believes that Jane Street is likely related to the notorious ‘Wallet A,’ which swapped 85 million UST for USDC and imbalanced the UST/3CRV Curve pool. Wallet A is often considered to be a major contributor to the depegging of Terra in May.
If true, the news would confirm rumors that have been swirling for months that Jane Street was involved.
Igamberdiev was able to identify three wallet addresses belonging to Jane Street through an announcement made just days prior to Terra’s crash. On May 3, it was revealed that Jane Street borrowed 25 million USDC from Block Tower through its permissioned lending pool — leading Igamberdiev to the addresses.
One in particular caught the researcher’s interest. Within two weeks of the collapse of Terra, the address received $15 million and repaid Block Tower, with an extra $10 million thrown in. The address invested $150,000 in crypto trading platform Tonic Dex. Then, it borrowed $25 million and deposited the funds into a Coinbase wallet.
This Coinbase wallet has only been used once before: when it received 84.5 million USDC from ‘Wallet A’ right after it made the swap that destabilized the UST/3CRV Curve pool, triggering Terra’s depeg.
Igamberdeiv argues that since this Coinbase wallet has only been interacted with twice — first the 84.5 million deposit by Wallet A and then a $25 million deposit by Jane Street — it’s “highly likely to belong to the same entity.”
Whether or not Jane Street intended to depeg UST remains unclear. The firm has been rumored to have participated in Terra’s attempted bailout, along with Jump Crypto and Celsius. “Given that Wallet A had their UST on Anchor for a month, it wouldn’t necessarily mean that Jane [Street] had malicious intent,” Igamberdiev wrote.
“However, we’d love to hear about Wallet A from them.”
Protos has reached out to Jane Street and will update this piece should we hear back.