Coinbase Exec Says SBF Was Behind 2022’s stETH De-peg

Conor Grogan, Director at Coinbase, has alleged that Sam Bankman-Fried and his quantitative trading firm Alameda Research were directly involved in a series of trades that led to the de-pegging of staked Ether (stETH) in June last year.

This de-pegging was previously identified as one of the contributing factors in the bank run of the bankrupt crypto lender Celsius Network. It is also associated with the downfall of the now-defunct crypto hedge fund Three Arrows Capital (3AC).

According to Grogan, two mysterious wallets associated with Sam Bankman-Fried and Alameda withdrew more than $75 million worth of stETH from FTX in June 2022. They subsequently flooded the market with these stETHs by market-selling, which triggered a de-peg. Four days after this fire sale, Celsius halted withdrawals on its platform.

At the time, Alameda Research was suspected of playing a role in the de-peg, but the suspicions were dismissed due to a lack of on-chain evidence. While it wasn’t clear if these wallets belonged to SBF or Alameda, on-chain analytics firm Nansen confirmed that they contributed to the de-pegging. According to Grogan, the swap by Alameda in June 2022 led to a 7 figure slippage, which only reaffirms that there was an underlying motive behind such a poorly executed sale.

However, a new transaction made earlier this month confirmed the identity of the wallet’s owner. On 12 January, stETH and ETH were transferred to the FTX estate from these wallets, which confirmed Alameda/SBF as the owner. The on-chain evidence backed Grogan’s allegations.

This isn’t Conor Grogan’s first Twitter thread highlighting suspicious transactions from FTX and Sam Bankman-Fried. Earlier this month, he revealed that the former FTX CEO had transferred crypto worth tens of millions since being released on bond last month.