New York-based cryptocurrency custody and exchange Gemini has refuted allegations about its involvement in the massive selloff of Terra’s native cryptocurrency, LUNA.
Gemini says not involved in LUNA price drop
Gemini, via its official Twitter account, has refuse earlier rumors that the company contributed to LUNA’s price crash after lending 100,000 bitcoins (worth $2.8 billion at the time of writing) to investment firm giants BlackRock and Citadel . The crypto exchange’s tweet read:
“We are aware of a recent story that suggested Gemini made a 100K BTC loan to large institutional counter-parties that reportedly resulted in a selloff in LUNA. Gemini made no such loan.”
Earlier rumors indicated that BlackRock and Citadel had jointly borrowed 100,000 BTC from Gemini. The two companies allegedly traded 25,000 BTC for UST, an algorithmic stablecoin that lost its peg, only to later dump both assets, which would have triggered the sell-off of LUNA and further broken UST’s $1 peg. .
BlackRock and Citadel have also dispelled the rumors, according to a Forbes report. A Citadel source said that the company is not involved in any stablecoin trading, including UST. BlackRock, like Citadel, also noted that the firm did not trade UST.
LUNA is currently down over 99%, with the price hovering around $0.30, according to CoinGecko. The UST stablecoin, which has yet to regain dollar parity, is at $0.6.
Meanwhile, Do Kwon, founder of Terraform Labs, recently proposed a plan to restore UST’s peg. According to the executive, the way forward would be to “absorb the stablecoin supply that wants to exit before UST can start to repeg.”
Kwon also noted that Terra approved Community Proposal 1164, which suggests an increase in LUNA’s minting capacity from $293 million to around $1.2 billion. The head of Terraform Lab added that as the UST is being rebuilt, the team will adjust the mechanism of the stablecoin to be secured.
Major South Korean Exchanges Place LUNA on Warning List
In the wake of LUNA’s price crash, South Korean exchanges have issued warnings about the crypto token. Upbit deemed LUNA a “cautionary item,” while Bithumb designated the asset as an investment warning item to protect investors.
The designation was issued due to the high price fluctuations of the token. Bithumb noted that the warning did not mean that LUNA was suspended, but said the exchange could decide whether or not to stop trading in the token after the designation warning expires.
