Is UST's collapse due to a sinister conspiracy involving the same people as the GameStop short squeeze? Or was it due to a structural problem with the nature of stablecoins?
Bad news for those who believe in the former: everyone named in this conspiracy theory was quick to deny it.
- BlackRock does manage cash reserves for USDC, but stated in a public statement that it does not trade UST.
- Similarly, Citadel Securities has publicly stated that it does not trade stablecoins.
- Gemini stated in a tweet that it has not made any such borrowing as alleged in the conspiracy theory.
- The conspiracy theory claims that BlackRock and Citadel borrowed 100,000 bitcoin from Gemini and exchanged 25% for UST. Then the two companies dropped the UST and BTC, crashing Luna and the bitcoin price.
- Charles Hoskinson, the founder of Cardano and co-founder of Ethereum, amplified this evidence-free narrative on Twitter before deleting the tweet.
- Meanwhile, crypto hedge fund Arca has told its partners that it is betting on UST, believing that the algorithmic stablecoin will eventually recover and maintain its peg.
- Luna is currently trading at 0.41 cents, while UST is at 0.68 cents.