GAM Investments has quashed fake news reports that surfaced on Friday that claimed the Swiss asset manager would invest some $3 billion to aid in the recovery of the Terra ecosystem, including LUNA and the TerraUSD (UST) stablecoin.
An announcement published on Thursday claimed that the firm was engaging in talks with Terraform Labs to assist in recovery attempts after Terra’s algorithmic stablecoin, UST, lost its U.S. dollar peg, causing a cataclysmic crash of the acclaimed blockchain protocol, which had become a darling of the decentralized finance (DeFi) space.
Cointelegraph has confirmed with GAM Investments that the press release was fabricated, even including fake quotes from GAM CEO Peter Sanderson. GAM’s head of communications and investor relations, Charles Naylor, categorically labeled the release as fake news.
The ongoing LUNA/UST debacle has been the focal point of the cryptocurrency space this week, with the collapse of the Terra ecosystem reverberating through the markets. DeFi protocols that were tied to UST saw losses of up to 80%, while Bitcoin (BTC) holdings backed by UST were also forced into a sell-off that saw the price of BTC go 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 UST while staking 240 million LUNA tokens in an effort to stem the devaluation of the UST dollar peg.
A day later, LUNA validators made the decision to take the network offline as the volatility of the LUNA/UST pair provided the potential for further governance attacks. Cryptocurrency exchange Binance decided to suspend LUNA/BUSD and UST/BUSD on its spot trading platform following the halting of the Terra blockchain.