Rumors, which began two days ago, claimed that Gemini had lent Bitcoin to BlackRock.
BlackRock and Citadel have sent an email to Forbes in which they address the Rumors about his involvement in the fall of the UST, Terra's stablecoin.
In the email, both firms state that They did not request a joint loan of 100.000 Bitcoins from the Gemini exchange to buy UST, causing the market to crash and causing the underlying LUNA market to lose over $25.000 billion.
Prior to the emails sent by BlackRock and Citadel, Gemini posted a tweet on its official account, in which it also denied having lent 100.000 Bitcoins to any major financial institution.
According to information provided by Forbes, of the two companies, BlackRock has been the most blunt in its statements. In this regard, Logan Koffler, spokesman for the firm, explained that “rumors that BlackRock had anything to do with the collapse of UST are categorically false. In fact, we have never traded with UST.”
It may interest you: UST peg to US dollar falls
Where does the rumor come from?
The rumor started a couple of days ago following a tweet posted by the user Jacob Canfield (@JacobCanfield), a trader and market analyst, in which he pointed out possible market manipulation. The tweet does not name BlackRock, although it does specifically mention Citadel.
In one of the author’s own comments, Canfield points out that Citadel was responsible for “screwing over” Robinhood investors who were betting on $GAME and $AMC stocks.
On the other hand, rumors began to gain traction due to the recent entry into the crypto market of the two firms. Recently, Ken Griffin, CEO of Citadel, outbid a DAO for a copy of the US Constitution, earning hatred from much of the crypto community. On the other hand, the firm received a $1.150 billion investment from Sequoia Capital and Paradigm to start using blockchain technology.
BlackRock became the Primary USDC Cash Reserve Manager, the stablecoin from Circle and Coinbase, with a $400 million investment.
It may interest you: Can other stablecoins follow UST into the death spiral?
The US Treasury and stablecoins
The collapse of the Terra stablecoin has caused Janet Yellen, Secretary of the United States Department of the Treasury, to highlight the Need for stricter regulation on stablecoinsYellen believes that, despite the benefits they can bring, they pose many risks to the financial system.
The official reiterated the importance and urgency of Congress passing legislation specifically targeting stablecoins, which is expected to be submitted for approval before the end of the year.
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Source: Forbes.
