(Bloomberg) -- The collapse of the TerraUSD (UST) stablecoin that sent shockwaves throughout the crypto ecosystem can’t be attributed to a single attacker, according to researcher Nansen. Instead, they identified the trades of a small number of players, including lender Celsius Network, as contributing to the decline.

UST, a stablecoin that ran on the Terra blockchain, was designed to maintain its dollar peg through algorithms and trading incentives that also involved a sister token, Luna. It became hugely popular in part because users could earn as much as 20% interest by lending it on Terra’s Anchor Protocol. It stopped working as intended earlier this month after selling pressure triggered a “death spiral” that sent UST and Luna tumbling and wiped out more than $40 billion in combined market value. The fallout also sparked declines in the broader market and continues to pressure prices of many coins.

“We refute the popular narrative of one ‘attacker’ or ‘hacker’ working to destabilize UST,” Nansen wrote in a research note out today based on its analysis of blockchain data between May 7 and May 11, when the stablecoin collapsed.

“The de-peg of UST could instead have resulted from the investment decisions of several well-funded entities, e.g. to abide by risk-management constraints or alternatively to reduce UST allocations deposited into Anchor in the context of turbulent macroeconomic and market conditions.” 

While the trading activity may not have been informed by any specific intent to destabilize the coin, it nevertheless served to break UST’s 1-to-1 peg with the US dollar, leading to its ultimate downfall, Nansen said. 

Some of these parties made money through arbitrage bets related to the difference in UST’s price on the Curve lending app relative to where it traded on decentralized exchanges and centralized exchanges like Coinbase Global Inc., Nasen found.

The battle between UST inflows and outflows on Curve intensified several hours after Terra’s co-founder Do Kwon posted a tweet mocking users’ concerns.

A wallet associated with the Luna Foundation Guard, where Kwon was a founding member and that was responsible for safeguarding UST’s peg, withdrew about 150 million UST from Curve. Four addresses, including one associated with Celsius, then put in about 105 million UST onto Curve. LFG counteracted with UST withdrawals, “and the back-and-forth continued into the morning of May 8,” Nansen said.

A small group of large holders started withdrawing UST from Anchor Protocol, and moved those funds onto Ethereum via the Wormhole bridge. They then swapped large amounts of UST for other stablecoins on Curve and -- as UST started losing its peg -- made money on arbitrage between Curve, decentralized and centralized exchanges by buying and selling positions. Withdrawals from Anchor began in mid-April of this year, Nansen found.

Two wallet addresses “significantly impacted the UST de-peg,” Nansen said, and one of them was associated with Celsius. The two addresses withdrew about 420 million UST from Anchor via 15 transactions, and they were the top wallets that used the Wormhole bridge to withdraw the funds into Ethereum at the time, Nansen said. Celsius was also “a close counterparty that has sent and received funds” from another wallet whose activities led to the de-pegging, Nansen said.

On May 11, Celsius tweeted, “As part of our responsibility to serve our community, @Celsius Network implemented and abides by robust risk management frameworks to ensure the safety and security of assets on our platform. All user funds are safe. We continue to be open for business as usual.” 

Celsius didn’t return multiple request for comment on the Nansen report.

Celsius pulled about $500 million of funds from the Anchor lending protocol, the Block reported earlier. A person familiar with the situation confirmed to Bloomberg that Celsius had moved some founds out of Anchor.

Celsius allows individual investors to earn interest on their crypto holdings by lending them out, offering returns as high as 18.63%. It had $11.8 billion in assets as of May 17, according to its website, down from about $16.9 billion on May 6. Celsius changed its rules earlier this year to allow only accredited US investors to add new coins for lending purposes and earning rewards after regulators raised concerns. In November, Celsius announced it closed a $750 million round of funding. 

Celsius has been subject to state and federal regulatory scrutiny. The company, along with several others, is the subject of a broad inquiry by the Securities and Exchange Commission into companies that pay interest on virtual token deposits, Bloomberg reported earlier this year. 

Read more: Crypto Lending Firms Celsius Network, Gemini Face SEC Scrutiny

Securities regulators in Alabama, Kentucky and several other states last year ordered or threatened to order the company to stop selling its products to residents. New York Attorney General Letitia James sent Celsius and other crypto companies a demand for information, often a precursor to a formal investigation.

Celsius recently filed with SEC for an initial public offering of its crypto mining subsidiary.

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