Monday, December 11, 2023

Crypto Companies Announced No Exposure To UST And LUNA

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Crypto companies announced no exposure to UST and LUNA as they both started crashing and the stablecoin lost its peg so stakeholders rushed to head off the damages caused by UST crashing so let’s read more today in our latest crypto news today.

As UST and LUNA crash to new lows, most in the crypto community are scrambling to assess how far-reaching the damage will be for the decentralized finance. UST hit a new low of $0.30 and the coin was designed to be pegged to the US dollar. LUNA on the other hand fell to $1 after crypto companies announced no exposure to these coins as a part of their efforts to help ease the panic. The CEOs and founders rushed to Twitter to make these declarations.

The co-founder of Mutlicoin Capital Kyle Samani said that he decided to join the group of crypto companies trying to protect themselves from the carnage. In addition to Multicoin capital, Dragonfly Capital and Framework also claimed safety from the UST crash. The trend continued all around Twitter with some companies remaining silent and implying exposure. As one Twitter user observed, the trend started resembling the phenomenon of Facebook users in a certain area marking themselves safe like they were in a disaster event.

Others in the meantime doubted some of the claims and called for empathy on a bad day for most. Many rushed to assess which crypto companies had huge stakes in UST and LUNA and how drastic the impact of the crash will be on the companies and the rest of the crypto marekt.

While Terra’s UST trades more than $0.75 from the dollar peg, the currency responsible for maintaining the peg LUNA is also crashing. In what is a historic week in stablecoin history, Terra’s LUNA that backs the UST stablecoin dropped below the dollar as of the time of writing. Terra’s LUNA was worth over $119 in April and now is trading at $0.85. LUNA lost 32% of its value in an hour and the news came after Terra’s dollar stablecoin crashed below its dollar peg and now trades under $0.40. In the case of Circle and Terra, this means that cash and bonds are behind the stablecoin but Tether’s fidelity to keep the cash reserves has been questioned a few times.

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