Tether’s chief technology officer says certain hedge funds recently attempted to spread panic and profit off shorting Tether (USDT).
Tether CTO Paolo Ardoino says hedge funds helped spread rumors that Tether isn’t 100% backed and has 85% exposure to Chinese commercial paper (CP) holdings.
CP holdings are a type of unsecured and usually discounted short-term debt issued by businesses and banks to meet liabilities.
Argues the CTO,
“I have been open about the attempts from some hedge funds that were trying to cause further panic on the market after TERRA/LUNA collapse. It really seemed from the beginning a coordinated attack, with a new wave of FUD [fear, uncertainty, doubt], troll armies, clowns etc.
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.”
Tether is the largest stablecoin by market cap, aiming to stay pegged to the US dollar. It’s trading for $1.00 at time of writing but dropped as low as $0.996 during the initial crypto market crash in May.
Ardoino notes, however, that Tether has never denied requests for redemptions at $1 and has more than 100% of the backing. The company also has reduced its commercial paper exposure from approximately $45 billion to $8.4 billion, according to the CTO.
In a recent interview, Ardoino also said the company plans to undergo a full audit from a top accounting firm.
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