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A conspiracy theory amplified by Cardano founder Charles Hoskinson and 4chan users. They claim Blackrock and Citadel borrowed 100K BTC from Gemini, the transaction being visible in their loan book.

They swapped 24K of BTC into UST, this was done quietly in anticipation of the attack. When timing was right, they called up Do Kwon at Terra Foundation saying they wanted to sell a lot of BTC for UST. As it was a large trade they told him they didn’t want to move the market and asked if he would like to buy their large block of BTC at a discount for UST. Do Kwan took the bait.

He gave them a huge chunk of UST, lowering the UST liquidity significantly. At that point, Blackrock and Citadel dumped all of the BTC and UST causing massive slippage and triggering a cascade of forced selling in both assets.

The real problem was Blackrock / Citadel knew that Anchor, which holds a lot of LUNA, was a Ponzi Scheme (they offer 20% APY) and this crash would trigger mode withdrawals than Anchor can repay. These forced withdrawals and selling would trigger a massive selloff in Luna, thus further breaking the $1 price and wrecking the market further.

Blackrock and Citadel can now buy the BTC back cheap to repay the loan and pocket de difference. Meanwhile, billions of longs were wiped out, many were liquidated.

It was pure market manipulation.

Source: coinmarketcap.com

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