Gemini Denies Bitcoin Loan Rumors

Gemini, a leading crypto exchange, has denied rumors suggesting that it made a large Bitcoin loan which contributed to UST’s stability crisis.

Gemini Denies Lending Rumors

Gemini has denied rumors that it issued a 100,000 Bitcoin loan—around $3 billion at current market prices—to BlackRock and Citadel.

A rumor that circulated widely this morning suggested that Gemini lent 100,000 BTC to Blackrock and Citadel. Those parties supposedly exchanged 25,000 BTC for TerraUSD (UST)—a stablecoin that has been rapidly falling in value since the weekend—and dumped both assets for profit. The supposed asset dump was said to have caused “massive slippage and [triggered] a cascade of forced selling of both assets,” causing selloffs of Terra’s non-stablecoin cryptocurrency LUNA.

Gemini asserted in a tweet today that it “made no such loan.”

The rumor reached a broad audience when Cardano CEO Charles Hoskinson shared it on Twitter with minimal comment. The tweet has since been deleted.

Though Anchor withdrawals are widely believed to have caused UST’s decline, there is no evidence that the above companies were involved in those events.

Terra Continues to Fall

Terra’s UST stablecoin’s value has declined rapidly since it depegged from its $1 target this weekend. The asset is now valued at $0.65, well below $1 but above the $0.32 mark it touched earlier this morning. Terra’s other token, LUNA, is down 95% this week.

Various recovery plans for TerraUSD are reportedly underway. Today, Terraform Labs CEO Do Kwon announced changes to the project’s economics, including a proposal that could increase LUNA’s minting capacity and adjustments to collateralization.

Reports from Wednesday also suggest that individuals from the project are seeking outside support from investors, though those efforts have seemingly found little success.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.