An asset management company reported to have put together a $3 billion rescue package for collapsed cryptocurrency ecosystem Terra – mothership of the LUNA token and UST stablecoin – has said the reports were FAKE.
Zurich-based GAM Investments say a press release distributed earlier today – complete with fictitious quotes from CEO Peter Sanderson – was completely fabricated, and likely an attempt to create some kind of market movement.
The announcement – which duped a number of publishers – claimed GAM was in advanced negotiations with Terraform Labs in a bid to help recover Terra’s algorithm-driven UST stablecoin which slipped its mooring, losing its $1 peg and causing a dramatic collapse of the popular protocol.
However, Charles Naylor – GAM‘s Global Head of Communications and Investor Relations – was quick to shoot down the spurious announcement.
“A press release purporting to come from GAM Holding was issued at 23.00 UK time on 12 May,” a statement read.
“There is no truth in the story and GAM did not issue a press release. GAM has strict controls on the dissemination of press releases, and we are investigating the source of this story and how it came to be published.”
Yesterday, Terra founder Do Kwon and Terraform Labs proposed a series of emergency measures aimed at saving the ailing LUNA UST stablecoin. The token crashed spectacularly, losing 99.98 per cent of its value across the week as it plummeted from $83.23 to $00.013, with analysts blaming several causes including market conditions and lack of use cases.
Terraform suggested burning all UST in its community pool before burning the remaining 370 million across Ethereum and staking 240 million LUNA to protect against network attacks.
Before any plan could be enacted, though, LUNA validators took the network down to guard against governance attacks, while Binance swiftly suspended LUNA/BUSD and UST/BUSD on its spot trading platform.