The world’s largest asset manager, Blackrock, and hedge fund giant Citadel Securities have denied claims that they had a role in the fall of terrausd (UST) and terra (LUNA). In addition, crypto exchange Gemini has denied making a bitcoin loan that resulted in the terra collapse.
Blackrock, Citadel Securities and Gemini deny the rumors
Following the collapse of terra (LUNA) after the algorithmic stablecoin terrausd (UST) lost its peg to the US dollar this week, rumors swirled that Blackrock, Citadel Securities and Gemini played a role in the downfall. All three companies quickly denied the accusation.
According to the rumors, Blackrock and Citadel Securities borrowed 100K BTC from cryptocurrency exchange Gemini and swapped 25% for UST. The two companies subsequently dumped the UST and BTC, crashing the prices of the two cryptocurrencies.
On Wednesday, the official Twitter account of Blackrock, the world’s largest asset manager, tweeted:
Rumors that we played a role in the collapse of the UST are categorically false. In fact, Blackrock does not trade UST.
The asset manager recently backed Circle Internet Financial Ltd., the issuer of another stablecoin called USD Coin (USDC). Circle’s stablecoin is currently the fourth-largest crypto with a market cap of almost $50 billion.
Cryptocurrency exchange Gemini also denied the rumors. The company tweeted on Wednesday:
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.
Hedge fund giant Citadel Securities also said it had nothing to do with the collapse of the UST stablecoin. A company representative told Bloomberg that the company “does not trade stablecoins, including UST.”
In March, Citadel Securities said that it plans to engage in making markets in cryptocurrencies over the coming months.
The collapse of LUNA has shaken the crypto market. As of this writing, the price of the cryptocurrency has fallen to $0.035, down nearly 100% in the past 24 hours. Meanwhile, the UST fell to a low of $0.30 on Wednesday, but has since rebounded to the current price of $0.60.
