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Rumors are circulating on-line that Citadel Capital could also be behind the UST crash as Janet Yellen pronounces a report on stablecoins.
The hedge fund, which is well-known for its involvement within the shorting of GameStop in 2021, might now be concerned in shorting LUNA and the mass sell-off of UST that began early this week. An unnamed supply denied the rumor stating:
“From a factual standpoint, Citadel doesn’t commerce stablecoins, together with UST.”
The leak comes from an anonymous submit on-line citing that Citadel borrowed 100K BTC and used it to quick UST. Critics additionally observe that Janet Yellen not too long ago revealed plans for a stablecoin report.
Yellen employed Citadel to interrupt UST peg so U.S. authorities can improve regulatory scrutiny on crypto ship tweet
— Steven (@Dogetoshi) May 10, 2022
Yellen introduced the report since stablecoins “threaten monetary stability.” Till the TerraUSD de-pegging, the largest menace from the standpoint of the crypto neighborhood was the obvious lack of transparency round Tether’s reserves. Nevertheless, the chance is clear right now as UST trades properly under its greenback peg.
Bitcoin analyst, Dennis Porter, said
“Mark my phrases. The UST failure can be used as proof by coverage makers to manage stablecoins to dying and champion CBDCs. This isn’t good.”
As seen within the video under, Yellen has already used the decline in UST’s worth to justify her anti-stablecoin stance in entrance of the Senate Banking Committee.
— db (@tier10k) May 10, 2022
Citadel has beforehand declared its want to turn out to be market makers within the crypto area, however presently, there isn’t any onerous proof to recommend they’re behind the crash. One other rumor surfaced that Bounce Capital, a supporter of Terra, is making ready a $2 billion bail-out bundle for UST.
Whether or not that is true or not, the necessity for a bail-out makes one take into consideration the origins of crypto when financial institution bailouts have been seen as a part of the motivation behind Bitcoin’s creation. If stablecoins want bail-outs from hedge funds, is that totally different from banks’ authorities bail-outs?
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