Tether CTO Paolo Ardoino has responded to a June 27 report by The Wall Street Journal that hedge funds have short bets on Tether’s stablecoin USDT via crypto brokerage Genesis Global Trading.
The article cites Genesis Global’s head of institutional sales, Leon Marshall, for commentary on how traditional hedge funds are looking to short Tether USDT. Marshall stated,
“There has been a real spike in the interest from traditional hedge funds who are taking a look at tether and looking to short it.”
Tether’s response
Tether’s CTO, Paolo Ardoino, took to Twitter a few hours later to refute hedge funds’ strategy and rationale for shorting USDT. Ardoino explained the tools being used by traditional finance to short the world’s biggest stablecoin by market cap.
2/
Tools: USDt/USD perps (the perfect attack vector that offers an asymmetric bet), spot short selling, DeFi pools unbalancing, …
Goal: create enough pressure, in the billions, causing ton of outflows to harm Tether liquidity and eventually buy back tokens at much lower price.— Paolo Ardoino (@paoloardoino) June 27, 2022
He went on to claim that hedge funds believe, and are partly responsible for, allegations that Tether is a house of cards built on imaginary assets and lies. He also attested that “competitors were spreading via coordinated troll networks” to discredit Tether and ruin its reputation. In Tether’s defense, Ardoino stated,
6/
But as we always said, Tether had/has in fact >= 100% of the backing, never failed a redemption and all USDt are redeemed at 1$.
In 48 hours Tether processed 7B in redemptions, averaging 10% of our total assets, something almost impossible even for banking institutions.— Paolo Ardoino (@paoloardoino) June 27, 2022
The liquidity showed by Tether following the bank run on its assets after Terra’s collapse is unparalleled. In 2007, U.K. bank Northern Rock saw a run on its assets of just 5%, causing it to end up in state ownership following a government bailout.
Tether has absorbed greater pressure over a shorter period without any apparent issues as $16B has been withdrawn from Tether over the past month, around 20% of its market cap, and no redemptions have been publicly reported.
The WSJ noted a $16 billion decline in Tether’s market cap — currently at $67 billion — but did not comment on whether that has had an impact on Tether’s reserves.
Testing Tether’s…
Click Here to Read the Full Original Article at Stablecoins – CryptoSlate…