On its official Twitter handle, Gemini, a cryptocurrency exchange, addresses the rumors that the company is in some sense responsible for the LUNA’s free fall since it provided a loan of 100,000 bitcoin (at the time of writing, worth approx. $2.8 billion) to investment firm giants Citadel and BlackRock.
Gemini stated in a recent tweet that a story is circulating claiming that Gemini made a 100K BTC loan to large institutional counter-parties as a consequence of which the LUNA selloff took place. The exchange added that it provided no such loans.
As per the early rumors, Citadel and BlackRock together purchased 100,000 BTC from Gemini. There are claims that the firms have swapped 25,000 BTC for UST, an algorithmic stablecoin that has lost its peg, only to set aside both assets later, which purportedly instigated the massive selloff of LUNA, further breaking the $1 peg of UST.
According to a Forbes report, BlackRock and Citadel have also dismissed the rumors. The company is not involved in any kind of stablecoin trading, according to a Citadel source, including UST. Just like Citadel, BloockRock also noted that the company is not involved in UST trading.
As per the data from CoinMarketCap, LUNA has plummeted by 99.9% and is now hovering at $0.00003232. The UST stablecoin, which is at $0.6, is yet to regain dollar parity.
In the meantime, the founder of Terraform Labs, Do Kwon, has recently drafted a plan to restore the UST’s peg. To absorb the stablecoin supply that wants to leave before UST begins to repeat would be the step ahead, according to the executive.
Terra also promoted community proposal 1164, according to which a rise in LUNA’s minting capacity to around $1.2 billion from $293 million, pointed out Kwon. The team plans to adjust the stablecoin’s mechanism to be collateralized as the UST is being reconstructed, says the Terraform Lab chief.
LUNA Put On Warning List By Major Major South Korean Exchanges
South Korean exchanges have given warnings regarding the crypto token as the LUNA’s price suffers a huge freefall. Upbit labeled LUNA as a “cautionary item,” meanwhile Bithumb declared the asset as an investment warning item to safeguard investors.
Due to the token’s high price fluctuations, the designation was issued. Bithumb, however, cleared that the warning does not mean that the exchange could decide to half-trading of the trading of the token or not once the designation warning has terminated.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.