Asset manager BlackRock and hedge fund Citadel Securities deny involvement in the crash of algorithmic stablecoin UST and cryptocurrency LUNA.

Prior to this, there were rumors on the network that companies borrowed 100,000 BTC from the Gemini exchange and exchanged 25,000 BTC with UST. They allegedly contacted Do Kwon, head of Terraform Labs, and said they would sell a large number of bitcoins and offered him to buy a large quantity of cryptocurrencies for UST at a discount.

It was then alleged that BlackRock and Citadel abandoned all their assets, leading to the collapse of UST, LUNA and the entire market.

“BlackRock and the Citadel knew Anchor had a lot of LUNA, and it was a Ponzi scheme, and this crash would result in more withdrawals than Anchor could afford. This would trigger a massive Luna sell-off and diverge from $1 and the market could get more money out of it. Now BlackRock and Citadel can buy bitcoin cheaply to pay off the loan and get the difference,” the theory continues.

It was distributed, among other things, by Charles Hoskinson, president of the IOHK. He later deleted the tweet and stated that the rumors were not true.

Gemini exchange said it did not lend 100,000 BTC to institutional counterparties.

BlackRock described the rumors that it was involved in the collapse of the UST as “categorically false” and noted that the company does not trade in the asset.

Citadel also stated that the company does not trade stablecoins, including UST.

At the time of writing, the UST costs about $0.6.

The price of LUNA dropped to $0.3.

Recall that at the beginning of May, the UST lost its peg to the US dollar due to an asset exit from Anchor. On May 9, users withdrew more than 3.3 billion USTs from the protocol.

The price of the algorithmic stablecoin and LUNA has been falling rapidly for several days in a row.

Do Kwon presented a plan to restore the UST price, but this did not prevent the bids from collapsing.