The Crash of LUNA and UST Is Made By Blackrock Capital and Citadel?

CoinCu News 1 month ago Report
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Cardano developer Charles Hoskinson just posted a message alleging the cause of the LUNA and stablecoin UST price drops.

The plan involved crypto investment management firms Blackrock and Citadel, according to a message sent to Hoskinson by a person named Anna, who claimed to have borrowed 100,000 Bitcoins from Gemini. These firms were supposed to have changed 25,000 Bitcoins into UST after receiving the total amount.

They then contacted Do Kwon, saying to want to sell a large amount of BTC for UST. They were alleged to have offered to sell a large number of BTC for a discounted price, which the latter accepted. Unfortunately, this resulted in UST’s liquidity being reduced.

When this happened, Blackrock and Citadel allegedly dumped all of the bitcoins and the UST, causing massive slippage and forcing liquidation of both assets.

“Blackrock and Citadel can now buy the BTC back cheaply to repay the loan and pocket the difference. Meanwhile, billions of longs and Bitcoin VaR were wiped out,” the message reads.

Do Kwon, on the other hand, has now spoken out about the details of the UST de-pegging recovery plan. He proposed increasing “basepool from 50M to 100M SDR and decrease PoolRecoveryBlock” from 36 to 18 in a series of tweets. As a result, the minting capacity will increase from $293 million to “$1200M.”

Kwon also gave his opinion on the likely reason of the de-pegging with this idea. He claims that the stablecoin’s price stabilization mechanism is absorbing 10% of UST’s total supply, and that the cost of simultaneously absorbing large sums of stablecoins “stretched out the on-chain swap spread to 40%.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Original Source: https://news.coincu.com/88043-the-crash-of-luna-and-ust/

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