GAM Investments dispels rumors they will invest $3 billion to help LUNA/ST recovery efforts

There are rumors that GAM Investments will invest around $3 billion to support the recovery of the Terra ecosystem, including LUNA and the TerraUSD (UST) stablecoin. However, GAM Investments called it fake news.

No rescue for Terra: Swiss asset manager denies $3B LUNA/UST bail-out talks

Accordingly, a few days ago, it was reported that the company was entering into negotiations with Terraform Labs to support recovery efforts after Terra’s algorithm co-stable, UST, lost its US dollar peg. . This inherently causes catastrophic failure for the popular blockchain protocol, which has become a darling of the DeFi space.

GAM Investments believes the press release is fabricated, even including fake quotes from GAM CEO Peter Sanderson. Charles Naylor, GAM’s Head of Communications and Investor Relations. He confirmed that the initial PR was fabricated, but they had no information on how that information went out.

The ongoing LUNA/UST crash has been at the heart of the crypto space this week, with the collapse of the Terra ecosystem reverberating across markets. DeFi protocols tied to UST saw losses of up to 80%, while UST-backed Bitcoin (BTC) was also forced to sell off, sending BTC price as low as $24,000 before recovering.

Terra founder Do Kwon and his team released a proposed recovery strategy for the LUNA ecosystem midweek that involved burning $1.4 billion in UST while staking 240 million tokens. LUNA in an attempt to prevent the devaluation of the US dollar.

A day later, the LUNA validators decided to take the network offline as the volatility of the LUNA/UST pair creates the possibility of further governance attacks. Cryptocurrency exchange Binance has decided to suspend LUNA/BUSD and UST/BUSD on its spot trading platform after the Terra blockchain shut down.

Due to the algorithmic nature of UST and its relation with LUNA, once the stablecoin started to lose its peg against the dollar, investors began taking advantage of the system by arbitraging it with LUNA.
This led to massive selling pressure on the latter, which propelled a mind-blowing price slump. LUNA traded above $80 a week ago, but it sits at $0.000055 as of writing these lines. Many exchanges have halted trading, and Terra announced (another) blockchain stoppage hours ago.

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