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Gemini denies influencing LUNA decline

TL;DR Breakdown
  • Gemini refuted claims of being involved in LUNA decline
  • The company denies claims of lending out BTC
  • Exchanges wary of LUNA volatility

Gemini crypto exchange has refuted claims that it had something to do with the recent dump of Terra protocol’s native token, LUNA. According to the exchanges, the rumors that it was involved in the massive decline of the token are false. The company noted that contrary to public opinion, it didn’t lend out 100,000 BTC to Blackrock and Citadel. The rumors going around in the crypto market were that the BTC worth $2.8 million that Gemini lent out to the companies caused the tumble witnessed by LUNA.

Gemini denies lending out BTC

The company clarified the rumors while stating categorically that it was never involved in any crypto borrowing activity with any firm. There was no connection between them and the LUNA dump that has been so much talked about in the market. LUNA made headlines after the digital asset saw a massive loss, culminating in traders losing massively in the last few days.

The news went around that BlackRock and Gemini exchanged 25,000 Bitcoin for the platform’s stablecoin, UST, after getting custody of the said funds from Gemini. No sooner than they had done that had the stablecoin lost its peg, leading to both companies selling off their UST. From the market consensus, the dumping of the stablecoin proved costly as it led to a massive loss registered by the token.

Exchanges wary of LUNA volatility

Both entities said to have been involved in the practices have also come out to rubbish the rumors. According to a spokesperson on behalf of Citadel, the firm has never gone into trading any stablecoin, adding UST to the bracket. BlackRock also refuted the claims stating that it was not also involved in the alleged activity. As per a CoinGecko stat, LUNA is still attempting to come back from the over 90% loss it has suffered in the wake of the claims.

UST is also not having it good with the stablecoin currently around $0.6 and without a currency backing it. In the wake of the dump, korean exchanges have started to brand the asset a highly inflationary asset as they have begun to make moves to protect investors. In a Bithumb statement, the asset would not be suspended for trading on its platform, but it would alert investors about the high volatility it is currently witnessing.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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