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, via its official Twitter handle, has 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.”
Earlier rumors stated that BlackRock and Citadel jointly borrowed 100,000 BTC 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.
BlackRock and Citadel have also dispelled the rumors, according to a Forbes report. A Citadel source said that the company is not involved in any stablecoin trading, including UST. BlackRock, like Citadel, also noted that the firm did not trade UST.
LUNA is currently down over 99%, with the price hovering around $0.30, according to CoinGecko. UST stablecoin, which is yet to regain dollar parity, is 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 Place LUNA on Warning List
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 noted that the warning did not mean that LUNA was suspended but said that the exchange could decide to halt trading of the token or not after the designation warning has elapsed.