After Yellen's report on stablecoins, rumors abound as UST falls

With Janet Yellen releasing a report on stablecoins, rumors are circulating online that Citadel Capital is responsible for the collapse of the UST.

The hedge fund known for shorting GameStop in 2021 may now be involved in shorting LUNA as well as the massive UST sell-off that started earlier this week. According to unidentified sources, the rumors are false.

"From a factual standpoint, Citadel does not trade stablecoins, including UST ."

According to an anonymous online post, Citadel borrowed 100,000 BTC and used it to short the UST. critics also point to Janet Yellen's recent announcement of the intent of a stablecoin report.

Yellen said that stablecoins "threaten financial stability". Prior to TerraUSD's decoupling, the crypto community's biggest concern was the lack of transparency in Tether's reserves. However, the risk is evident today, as the UST is trading well below its peg to the U.S. dollar.

Bitcoin analyst Dennis Porter said

"Mark my words. The failure of the UST will be used by policymakers as evidence to regulate stablecoins and support the CBDC. That's not good."

Citadel has previously stated that its goal is to become a market maker in the cryptocurrency space, but there is no concrete evidence that they are responsible for the decline. Another report is that Terra booster Jump Capital is planning a $2 billion bailout package for UST.

Whether or not this is true, the demand for bailouts is reminiscent of the roots of cryptocurrencies, when bank bailouts were seen as driving the formation of bitcoin. Is a stablecoin asking for a hedge fund bailout any different than a bank asking for a government bailout?