Will Clemente came to the conclusion that the May 2022 Terra saga may have contributed to Alameda Research's eventual demise.

He bases his assumption on the hedge fund's trading history on FTX, which dates back to the beginning of 2022.

The analyst blames the decline on excessive leverage prior to the event or a foolish attempt to absorb poisonous flow for FTX.

The collapse of the Terra Luna ecosystem in May 2022, which is when Alameda Research's balance history on its sister company and cryptocurrency exchange, FTX, was revealed, dealt the hedge fund its fatal blow. This is the viewpoint of Will Clemente, a well-known cryptocurrency researcher and the creator of the digital asset research company Reflexivity Research, who is a Twitter user.

It was a fatal blow to Alameda. LUNA (aka LUNC)

Clemente made his remarks as the researcher was looking at the government exhibit displaying Alameda's balance history on FTX before to the Omnibus Hearing, scheduled for September 13. According to the analyst, "Luca was the death blow to Alameda," as the company recorded up to $12 billion in a period of less than two months to May.

Following the depegging of the Terra stablecoin and its support coin LUNA, the remainder of the altcoin community, including #bitcoin (BTC) price and Ethereum (ETH), bled as the Terra ecosystem crumbled, igniting the bear market from which investors are still navigating today. The LUNA and FTX crises were undoubtedly among the worst that the #crypto industry has ever experienced. Using X user as a source:

What a year this was in #cryptocurrency , with the Luna and FTX incidents being the hardest for this industry.

The premature failure of the FTX exchange and its sister company Alameda Research was argued to be related to the collapse of the Terra/LUNA stablecoin by blockchain analytics company Nansen in a recent report. The study claims that FTX's bankruptcy may have been "inevitable" from the moment the "arbitrage-based dollar peg for the two-token stablecoin ecosystem failed." Notably, the crash saw up to $48 billion in value evaporate, forcing several companies into bankruptcy under the pretext of "over-leveraged holdings."

The Nansen study disproved accusations that FTX and its subsidiary Alameda collapsed as a result of poor bets, attributing the failure to "malfeasance" rather than ineffective management.

How the trickle effect manifested in the #FTX Alameda implosion

Seeing that the circulating supply of FTT tokens was extremely low, even minor sales had a significant impact on the price. Since FTX effectively controlled 80% of the FTT supply rather than the expected less than 50%, this deception contributed to the worsening of the problem.

As Alameda and FTX own the majority of the FTT supply, a sell-off from one of the companies could have an impact on the balance sheet of the other.

After the Terra/LUNA catastrophe, FTX surreptitiously loaned Alameda billions of dollars from client accounts in a practise known as "commingling." In light of the fact that FTT was the sole form of collateral and eventually became illiquid, prompting the exchange to halt withdrawals, the Nansen report lends support to Clemente's premise of growing losses, making the Terra crisis "a realistic case."