key takeaways
- Gemini today denied rumors that it made a 100,000 BTC ($3 billion) loan to BlackRock and Citadel.
- An unsourced rumor suggested that the companies abandoned borrowed crypto, causing the price of TeraUSD to drop.
- UST is currently priced at $0.65, lower than its intended $1.00 price, but above the $0.32 mark touched earlier today.
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Gemini, a major crypto exchange, has denied rumors saying that it made a large bitcoin loan that contributed to UST’s stability crisis.
Mithun refutes lending rumors
Gemini has denied rumors that it has issued 100,000 bitcoin loans – about $3 billion at current market capitalization – to BlackRock and Citadel.
A widely circulated rumor this morning suggested that Gemini lent 100,000 BTC to BlackRock and Citadel. Those parties are believed to have exchanged 25,000 BTC for TeraUSD (UST) – a stablecoin that has been falling sharply over the weekend – and left both assets for profit. The alleged asset dump caused “massive slippage and” [triggered] A cascade of forced selling of both assets,” led to the sale of Terra’s non-stablecoin cryptocurrency LUNA.
Gemini insisted in a tweet today that it “has not taken any such loan.”
The rumor reached a wider audience when Cardano CEO Charles Hoskinson shared it on Twitter with minimal commentary. The tweet has since been removed.
Although anchor withdrawals are widely believed to have caused UST’s decline, there is no evidence that the aforementioned companies were involved in those incidents.
Terra continues to fall
The value of Terra’s UST stablecoin declined sharply as it fell short of its $1 target later this week. The asset is now valued at $0.65, which is well below $1, but above the $0.32 mark this morning. Terra’s other token, LUNA, is down 95% this week.
Various recovery plans are reportedly underway for TerraUSD. Today, Terraform Labs CEO Do Kwon announced changes to the economics of the project, including a proposal that could increase Luna’s mining capacity and plans to introduce a staking system.
Wednesday’s report also shows project individuals are seeking outside support from investors, although those efforts have met with little success.
Disclosure: At the time of writing, the author of this article owns BTC, ETH and other cryptocurrencies.