MobileCoin (MOB) Cryptocurrency Reportedly Cracked FTX One Year Before LUNA Crash

While many point out that Terra (LUNA) was the investment that drove FTX to bankruptcy, new data indicates that Sam Bankman-Fried’s brokerage was insolvent a year earlier, likely due to a cryptocurrency called MobileCoin (MOB).

Using sources from the Financial Times, the Protos website highlights that the FTX would have undergone some kind of “short squeeze” as the MOB moves from $5 to $73 between March and April 2021.

In total, FTX’s losses on this occasion would have been in the order of $1 billion, wiping out all of the exchange’s gains and rendering it insolvent.

Further on, two Financial Times sources pointed this out “As the price rose, the trader used the position to borrow money from the FTX, possibly a plan to withdraw dollars from the exchange.” In other words, it would have been an attack on FTX’s unique settlement system.

“When the price of MobileCoin skyrocketed, the trader sent a large amount of MobileCoin as collateral to have margin on other assets”explained the Protos website.

“Alameda was forced to step in and take a trader position to protect FTX”wrote the Financieele Dagblad.

However, due to the lack of transparency of the broker’s reserves, no one suspected that it was insolvent. Growing, especially in the number of users, such a gap not only went unnoticed, but must have been filled at some point, but FTX would later make new mistakes.

MobileCoin ICO is also suspected

Besides the link with FTX issues, MobileCoin (MOB) itself seemed unsustainable. Describing their initial coin offering (ICO) as “An easy way to make money with a non-profit app”the Protos site took the opportunity to strip the project.

According to the website, the MOB was said to have a connection to the Signal messaging application, which is still used by Sam Bankman-Fried, but had financial problems in early 2021. Such a fundraising via an ICO could therefore have been the solution used by the creators of Signal, accused of driving up the price of the MOB.

Finally, another point highlighted by Protos is that MobileCoin does not disclose the current and total supply of its tokens, something essential in this market.

Despite rising to $73 in April 2021, the MOB spiraled into death in the following months. At the time of writing, the cryptocurrency is trading at just $1.63, or 97.77% below its all-time high.

As for FTX, new information like this shows how shady its management was. Therefore, those who believed that Sam Bankman-Fried was a brilliant trader and gave him money can be increasingly sure that they have fallen into a major scam.