Did BlackRock and Citadel Cause Terra’s Downfall? Cardano Creator Charles Hoskinson & Investors Speak Out After Price Drops Over 80%

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Is It Over For Terra Luna and UST?

Cardano creator Charles Hoskinson recently shared a message that alleges the cause of the price crash of Terra (LUNA) and stablecoin UST.

According to a message sent to Hoskinson by a person named Anna, the event is a well-executed strategy that capitalized on Terraform Labs CEO Do Kwon’s alleged naivety and Anchor being an alleged Ponzi scheme.

The scheme involved crypto investment management firms Blackrock and Citadel, whom the person Anna claimed to have borrowed 100,000 bitcoins from Gemini. After receiving the said amount, these companies were claimed to have converted 25,000 bitcoins into UST.

Afterward, they contacted Do Kwon, saying that they wanted to sell a lot of BTC for UST. However, they were said to have offered to sell a significant amount of BTC for a discount, which the latter accepted. Unfortunately, this caused UST to lower its liquidity.

Once this happened, Blackrock and Citadel were alleged to have dumped all the bitcoins and the UST, which caused huge slippage and triggered a cascade of forced liquidation in both assets.

The message concluded:

Blackrock and Citadel can now buy the BTC back cheaply to repay the loan and pocket the difference. Meanwhile, billions of longs and Bitcoin VaR were wiped out.

On the other hand, Do Kwon finally spoke up about the details of the rumored recovery plan for TerraUSD’s (UST) de-pegging. In a series of tweets, he proposed to increase “basepool from 50M to 100M SDR and decrease PoolRecoveryBlock” from 36 to 18. Consequently, this move will raise the minting capacity from $293M to “$1200M”.

Alongside this proposal, Kwon also shared his thoughts on the possible cause of the de-pegging. He said that the stablecoin’s price stabilization mechanism is absorbing 10% of UST’s total supply and that the cost of absorbing huge amounts of stablecoins simultaneously “stretched out the on-chain swap spread to 40%.”

Terra (LUNA) and its UST stablecoin had the worst crash today as Terra fell 96.2% and is down to $1.21. Its UST stablecoin plunged to $0.40 as it depegged from the USD plummeting more than 60% in less than 24-hours. Though its founder Do Kwon revealed a plan to save UST stablecoin, the damage to its price and reputation is already done. Read here to know Do Kwon’s plans to protect UST from further damage.

Watcher Guru spoke exclusively to Terra (LUNA) investors and both lost a drastic amount of savings in today’s crash.

Read More: This Crypto Tycoon Had Predicted Terra’s UST Will Crash Back in 2021

Terra (LUNA) UST Investors Lose Savings

Suraj Gowda (name changed) revealed he purchased Luna in July 2021 for $6 through WazirX. He requested us to use a pseudonymous name to protect himself from being made fun of online. Terra has become the butt of all jokes on social media while its investors are reeling in pain.

The 27-year-old stated that he purchased a fancy number of 666 coins worth $4,000 as the “number sounded cool”.

“I regret not selling it when it crossed $100 last month as I assumed it could go much higher,” said Gowda a resident of Bangalore. When asked what made him not sell Luna when it reached its all-time high. He said, “My goal was to make 1 Crore Rupees ($129,000) and I didn’t want to sell it until it reached there. I purchased it at a very good price of $6 and it’s now less than $1 after holding for 10-months.”

Gowda revealed that he’s afraid to inform his parents that he lost money and also cursed India’s tax on cryptos. “First the government placed 30% tax and now this (referencing his disappointment of Terra).”

Arpit Kumar (name changed due to security reasons), a resident of Delhi revealed that he invested in Terra because articles suggested: “it will moon”. He said, “I read an article last year suggesting Terra could reach Ethereum levels by 2025 so I invested in it. It is now worth less than shit coins. I lost most of my money.”

When asked how much he invested in Terra, Kumar revealed he purchased it for $17 in August 2021 through WazirX. He stated he purchased 400 coins worth $6,800. His investment turned out to be less than $400 today. Kumar confirmed he has not informed the losses to his parents either.

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