Some of you saw it coming; some of you still can’t believe it’s real. Was the “most significant collapse in crypto history” an attack?

No matter how hard your day is going, spare a thought for LUNA investors Wednesday. Do Kwon, CEO of Terraform Labs and 18th on Cointelegraph’s Top 100, has lost billions of dollars for their investors.

Do Kwon’s coins came crashing down as brainchild Terra (LUNA) sinks over 97% from highs, while the stablecoin TerraUSD (UST) fell 75% lower than its intended dollar parity.  At one point, the LUNA price tread lower than UST.

There are real consequences to the coins’ failures. On the TerraLuna Reddit page, the suicide hotline has been pinned; the subreddit is indeed a disturbing read as the LUNA crisis unfurls.

Those of you waiting for the earth to become unstable-

I'm afraid you will be waiting until the age of men expires

Cities have returned to the dust

Oceans have gone bone dry

The map of continents have been drawn anew

And dinosaurs once again roam the earth

Gluck

— Do Kwon (@stablekwon) May 8, 2022

So how did it happen? How did a braggadocious personality catalyze one of crypto’s biggest crashes?

What was once considered a FUD attack on Luna has evolved into something far more conspiratorial and insidious. Among the most popular theories is an alleged George Soros-inspired “attack” on the Terra ecosystem, in which the buyer made off with over $800 million.

How to make a >800 million dollars in crypto attacking the once 3rd largest stablecoin, Soros style:

Everyone is talking about the $UST attack right now, including Janet Yellen. But no one is talking about how much money the attacker made (or how brilliant it was). Lets dig in pic.twitter.com/nGVfqjpVJb

— Onchain Wizard (@OnChainWizard) May 10, 2022

Ransu Salovaara, CEO at Likvidi, echoed the theory, explaining to Cointelegraph that “some parties picked UST’s algorithm peg as a market manipulation target and borrowed lots of Bitcoin (BTC) to execute this, what some call “Soros style,” attack on UST.”

“It’s been estimated that the short-seller “attacker” made about 800 million dollars on this event.”

Twitter user 4484 provides a succinct summary of the attack:

ok here is how the $luna $ust attack was coordinated & executed. (quoted from a friend)

– attacker OTC accumulated $1bn of UST
– borrowed $3bn in $btc
– spread around some fud about peg and bank runs
– dumped the fuck out of their $3bn $btc on market to trigger wider panic

— 4484 (@4484) May 10, 2022

The “attack” caught mainstream attention, U.S. Secretary of the Treasury Janet Yellen brought up algorithmic stablecoins on Tuesday, highlighting the “risk” they pose during a Senate Banking Committee. Economist Frances Coppola concurred that the UST debacle was an attack.

The host of CNBC Crypto Trader, Ran NeuNer, and a “good friend” of Do Kwon, sent the rumor mill into hyperdrive with his suggestion that American market maker Citadel could be behind the “attack.” Charles Hoskinson, CEO of IOHK, also said the “word on the street” is that it may be Citadel. 

While billionaire Citadel Securities founder Ken Griffin has laid bare his dislike for the crypto industry—comparing the trillion-dollar market to abstract art—a suggestion that Citadel would attack UST remains speculation. Inevitably, Crypto Twitter accused Neuner of trying to protect his significant yet fast evaporating LUNA bags.

Speculation that the attack on $UST was a coordinate attack by Citadel. This seems highly plausible given their anti- Bitcoin stance. Also, when @stablekwon/LFG publicized they would protect the peg at certain level it was an invitation to attack. Wall Street are experts at this.

— Ran NeuNer (@cryptomanran) May 10, 2022

Meanwhile, Larry Cermack, a crypto researcher, suggested that over $1 billion is inbound to shore up and fight the Luna Foundation Guard wildfire. According to Cermack, venture capital would be provided by Celsius, Jump and Alameda, among others.

Theories aside, for many crypto observers, researchers and believers, the UST car crash was a) foreseeable and b) one of the most significant crypto deaths in history.

For Tree of Alpha, the white-hat hacker who discovered a crisis-level flaw in the Coinbase API, LUNA’s demise is “by far, the biggest Ponzi death spiral collapse in the history of Crypto, by a factor of 16.” Nic Carter of Castle Ventures made the same call; it’s “the most significant collapse in the history of the crypto space.”

Tree of Alpha compared LUNA to the confirmed Ponzi scheme Bitconnect, a $2.4 billion fraud case involving highly memed frontman Satish Kumbhani that went down in crypto infamy.

Cory Klippsten, CEO of Swan Bitcoin, who had been banging the Bitcoin maximalist drum (i.e, avoid shitcoins at all costs) since the inception of UST, quickly memed “BitKwonnect” into existence.

Bitkwonneeeeeeeeect!!! pic.twitter.com/17fIp02jrx

— Cory Klippsten (@coryklippsten) May 11, 2022

Lyn Alden, number 100 on Cointelegraph’s top 100, had also previously warned of UST’s lurking issues. In an investor letter, Alden described the accompanying Bitcoin “selling pressure” that would flood the market with tens of thousands of coins if the UST peg crumbled. She was right: All of the events she mentions occurred over the past 48 hours.

Terra's multi-billion dollar algorithmic stablecoin UST blew up today.

Aside from destroying the value of $LUNA, they used their bitcoin reserves to try to defend the peg, kind of like a flailing emerging market using its gold reserves to defend its FX. https://t.co/uCfF4hmDtP

— Lyn Alden (@LynAldenContact) May 10, 2022

Perhaps the ultimate slam dunk “I did warn you!” was from John Carvalho, CEO of Synonym, who suggested that UST felt like “a huge trap.” He chided followers against UST in March 2022:

Do Klown #UST $UST $LUNA pic.twitter.com/TplXaQVFgA

— John Carvalho (@BitcoinErrorLog) May 11, 2022

Citadel’s managing director David Millar provided the following statement to Cointelegraph following the publication of this story: “Citadel Securities does not trade stablecoins, including UST.”