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’s Price Decline
Gemini has an official Twitter handle. denied earlier rumors that the company contributed to LUNA’s price plunge after loaning 100,000 bitcoin (worth $2.8 billion at the time of writing) to investment company giants BlackRock and Citadel. The crypto exchange’s tweet said:
“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.”
An earlier rumor claimed that Citadel and BlackRock had borrowed 100,000 BTC each from Gemini. Both companies allegedly swapped 25,000 BTC for UST, an algorithmic stablecoin that has lost its peg, only to dump later both assets, which supposedly triggered LUNA’s massive selloff and further broke UST’s $1 peg.
According to Forbes, BlackRock and Citadel also denied the rumors. Citadel sources claimed that the company isn’t involved in stablecoin trading. BlackRock also stated, as Citadel, that the firm does not trade UST.
According to CoinGecko LUNA is down more than 99% with its price hovering around $0.30. UST stablecoin is currently 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 endorsed community proposal 1164, which suggests an increase in LUNA’s minting capacity from $293 million to around $1.2 billion. The Terraform Lab chief added that as UST is being rebuilt, the team will adjust the stablecoin’s mechanism to be collateralized.
Major South Korean Exchanges Put LUNA on Warning Liste
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 because of the token’s high price fluctuations. Bithumb said that although the warning does not mean that LUNA has been suspended, it did indicate that the exchange might decide to halt trading after the warning expires.