BlackRock And Citadel Deny Involvement In Terra UST Collapse
After rumors started to circulate on social media that BlackRock and Citadel were involved in the recent collapse of Terra (LUNA) after its algorithmic stablecoin, both have denied involvement.
BlackRock and Citadel Securities have pushed back against the rumors that they anything to do in the recent collapse of LUNA and its stablecoin TerraUSD (UST).
According Citadel representative, the company is not involved in the situation and “does not trade stablecoins, including UST,” to answer to claims circulating on social media in recent days.
“Rumors that BlackRock had a role in the collapse of UST are categorically false. In fact, BlackRock does not trade UST,” said BlackRock spokesperson Logan Koffler.
The asset manager recently backed Circle Internet Financial Ltd, which runs another stablecoin, USD Coin. Some of the speculators said that the move was to take down UST as a competitor to USDC.
TerraUSD, or UST has spiraled to new lows since breaking its peg of one-to-one to the dollar over the weekend. The collapse poses one of the biggest tests yet to decentralized finance and the will of its backers to defend it.
Terra’s governance token LUNA was trading at over $119, but along with UST crashed to lows of $0.00001675, and currently trades at $0.0004759.
Do Kwon, the Founder of Terra, revealed a plan to preserve the embattled crypto asset by reconstituting the chain and resetting network ownership to one billion tokens.
The plan detailed that 40% of the remaining tokens should be dedicated to LUNA holders before the depegging event, another 40% should go toward UST holders pro-rata at the time of the network upgrade, 10% to LUNA buyers the moment before the blockchain went under and 10% to the community pool for future projects.
“Why does this redistribution make sense? UST holders need to own a large share of the network. As the network’s debt holders, they deserve to be compensated for the tokens they have been holding to the end.
Terra needs a community to continue to grow and make its blockspace valuable again – the only way to do this is to make sure that token holders before the attack commenced, the most loyal community members and builders, stick around to keep providing value.
It is a hard balance – and no easy answers in redistributing value within the network. But value must be distributed to allow the ecosystem to survive, and in its current state it will not.”
