Following the market pushbacks created by the shockwaves of Terra’s UST stablecoin depegging has made numerous implications afterwards
Many blue chip institutions are busting the rumors that are revolving around on social media about their involvement in the collapse of Terra (LUNA) network that happened recently. The destruction of the Terra network started after the depegging of its stablecoin UST because of its algorithmic stablecoin procedure. As per the new reports of Bloomberg that stated that several huge institutional investors including Citadel Securities and BlackRock are taking their steps back after raising the notion that these institutions had their involvement behind the LUNA disintegration along with its UST stablecoin.
Citadel Securities’ representative said that the company has no record of trading in stablecoins including Terra’s UST. On the other hand, BlackRock spokesperson Logan Koffler has similar take while saying that rumors that the institution has any role in collapsing of UST stablecoin are completely false as Blackrock has no trade regime with UST.
Price of Terra (LUNA) has seen a massive hyperinflationary drop of about 99% where it went down from about $1.00 to $0.0083 while prompting the blockchain network to cease its operations completely. It was just about forty days ago when Terra was trading at $119 where at the time of writing LUNA token of the network had moved so rapidly and dropped till $0.00015.
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Stablecoin of Terra network, UST has also seen the massive price drop while it’s depegging from the dollar and falling from its original trading price to $0.08 that however rebounded and is trading at around $0.154 at present. However, founder and CEO of Terra network, Do Kwon has said over this that he has a plan by which the embattled crypto assets would be preserved and that is to reconstitute the blockchain and reset the ownership of the network to approx one billion tokens.
As per Do Kwon, about 40% from the tokens remaining would be dedicated to holders of LUNA token in the event of token depegging and another 40% part should be going towards the holders of UST stablecoin at the time of network upgrade. 10% of tokens would be allocated to LUNA buyers at the moment before going the blockchain under and the rest 10% to the future projects community pool.
Source: https://www.thecoinrepublic.com/2022/05/15/has-involvement-in-terra-luna-collapse-caused-citadel-securities-and-blackrock-to-push-back/