Citadel Securities, BlackRock Claim They Had No Role in the UST Collapse

cryptonews.com:

Global market maker Citadel Securities and major asset manager BlackRock have denied involvement in the collapse of Terra's algorithmic stablecoin TerraUSD (UST).

The assertions came after a conspiracy theory that alleged Citadel Securities and BlackRock made a coordinated attack on UST and hugely profited from its collapse had spread like wildfire on social media platforms.

In a statement to Bloomberg, a representative from Citadel Securities said that it is not involved in the situation and “does not trade stablecoins, including UST.”

BlackRock also denied involvement, stating: 

“Rumors that BlackRock had a role in the collapse of UST are categorically false. In fact, BlackRock does not trade UST,” said spokesperson Logan Koffler in an emailed statement.

On May 8, UST started slowly distancing from its intended USD 1 peg after a wave of sell-off hit the crypto market. The algorithmic stablecoin failed to recover its peg, exacerbating the market's lack of confidence, which resulted in high-volume withdrawals from Terra's Anchor Protocol, where more than UST 12bn were once locked.

As reported, a number of conspiracy theories have started floating around the crypto community right away, speculating what could have led to UST losing its peg.

While some claimed that the problem happened because of a structural issue with the nature of the stablecoin, others started to blame major investment firms, claiming that they had organized a coordinated attack.

One such theory included Citadel Securities and BlackRock and alleged that they took a huge Bitcoin loan from crypto exchange Gemini, then traded some for UST, and started dumping their bitcoin (BTC) and UST after opening a short position.

The theory was shared by a number of crypto