Did UST collapse because of a shadowy conspiracy involving the same cast of characters from the GameStop (GME) short squeeze? Or was it because of a structural problem with the nature of stablecoins?
Bad news for those who believe the former: Those named in this conspiracy theory have swiftly denied involvement.
- The conspiracy theory alleges that money manager BlackRock (BLK) and market maker Citadel Securities borrowed 100,000 bitcoin (BTC) from the Gemini cryptocurrency exchange and swapped 25% for UST. Then the two companies dumped the UST and BTC, crashing UST's sister LUNA token along with the price of bitcoin.
- Charles Hoskinson, the founder of Cardano and co-founder of Ethereum, amplified this evidence-free narrative on Twitter before deleting the tweet.
- In its denial, BlackRock, the world's biggest asset manager and which manages Circle's USDC cash reserves, said it doesn't trade UST.
- Likewise, Citadel publicly stated that it does not trade in stablecoins.
- Gemini said in a tweet that it has made no such loan as claimed in the conspiracy theory.
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