BlackRock and Citadel Securities denied involvement in the fall of the UST stablecoin

The statements were made in response to rumors circulating online

12.05.2022 - 08:15

829

2 min

What’s new? Asset management company BlackRock and hedge fund Citadel Securities have rejected involvement in the situation with the fall of the TerraUSD (UST) stablecoin rate and Terra’s (LUNA) token. This is reported by Forbes, citing emails received from the companies.

News on the Forbes website

What statements have been made? The comments by BlackRock and Citadel Securities came amid rumors that the companies borrowed 100 000 BTC ($2,8 billion at the exchange rate on May 12) from the cryptocurrency exchange Gemini to buy UST stablecoin and then sold the assets, causing the market to collapse.

BlackRock spokesperson Logan Koffler said that rumors of the company’s involvement in the UST collapse are false. The representatives of the Gemini crypto exchange also deny making a 100 000 BTC loan to any institutional companies. They reported this on Twitter.

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.— Gemini (@Gemini) May 11, 2022

What events happened before? On May 8, the rate of the algorithmic stablecoin UST lost its peg to the dollar and on May 11 it dropped to a low of $0,22. The rate of the LUNA token also dropped by down 86% overnight. The Terra protocol uses the native token LUNA to secure UST, so their rates are closely linked.

In early February, BlackRock announced that it would offer customers the ability to trade digital assets as well as arrange loans secured by cryptocurrencies. In March, Citadel founder Ken Griffin said that the fund intends to enter the cryptocurrency markets in 2022.

Author: