Citadel Securities and BlackRock Deny Trading with TerraUSD (UST)

BlackRock and Citadel Securities denied trading the problematic TerraUSD (UST) in separate emails. 

BlackRock and Citadel Securities Denial 

In separate emails supplied exclusively to Forbes, asset manager BlackRock and hedge fund giant Citadel Securities denied trading the problematic TerraUSD (UST). 

The statements follow swiftly growing claims that the financial behemoths had borrowed 100,000 bitcoin from cryptocurrency exchange Gemini to buy UST, only to dump the assets, causing the market to crash and wiping away more than $25 billion in underlying LUNA market value. 

Gemini denied offering a 100,000 bitcoin loan to any significant institutional counterparties in a tweet earlier on Wednesday, while a Citadel source familiar with the claims stated the company “does not trade stablecoins, including UST.” BlackRock took it a step farther. 

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

The rumor mill began two days ago when a tweet with an identical message was retweeted over 1,000 times, despite the absence of any mention of BlackRock. Forbes has not yet found any credible proof to back up the assertions.

The rumors seem to have gained traction thanks in no small part to both firms’ recent entrance into crypto.

According to a release, Citadel took a $1.15 billion investment in January from Sequoia Capital and Paradigm, a crypto startup business that hopes to use the firm’s technologies to lend legitimacy to crypto markets. Many in the crypto community were outraged last year when billionaire Citadel CEO Ken Griffin outbid a group of 17,000 crypto investors to buy an original copy of the United States Constitution.

In contrast, BlackRock recently became the primary reserve manager for the cash reserves of another stablecoin, USDC, which is handled by Circle and Coinbase, and made a strategic investment in Circle’s most recent $400 million funding round. 

The $176 billion cryptocurrency subgroup, which aims to compensate for crypto’s famed volatility by using more stable assets like the US dollar or maths, increased the stakes of the stablecoin collapse. The fall was referenced by US Treasury Secretary Janet Yellen when she asked for stablecoin regulation before the end of the year.

BlackRock, Inc. is a New York-based American international investment management company. BlackRock is the world’s largest asset manager, with US$10 trillion in assets under management as of January 2022. The firm recently affirmed its standing with cryptocurrency and will further be creating solutions in that regard. 

Citadel LLC is an American multinational hedge fund and financial services company. Founded in 1990 by Kenneth C. Griffin, it has more than US$38 billion in assets under management as of August 31, 2021