Tether CTO refutes stablecoin FUD as short-sellers circle

Tether CTO Paolo Ardoino has now responded to a 27th June report by The Wall Street Journal that hedge funds have short bets on the Tether stable coin USDT with the 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 said, “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

Paolo Ardoino, the CTO of Tether, took to Twitter a few hours later to refute the hedge funds strategy and rationale for shorting USDT. Ardoino said that the tools being used by traditional finance to short the world’s biggest stable coin by market capitalization.

He went on to claim that the 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 with the help of coordinated troll networks to discredit Tether and ruin its reputation.

The liquidity shown by the Tether following the bank’s runs on its assets after Terra’s collapse is unparalleled. In the year 2007, UK 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Tether has absorbed greater pressure over a shorter period of time without any apparent issues, as $16 billion has been withdrawn from Tether over the past month, around 20% of its market cap, and no redemptions have been publicly reported.

The Wall Street Journal revealed a $16 billion decline in the Tether’s market cap – as of now at $67 billion – but did not comment on whatever has had an impact on the Tether reserves.

Testing Tether’s liquidity

Ardoino also revealed the actions of other financial entities and their investment in projects such as Terra USD staking.

A look at Genesis Global

Genesis Global is a brokerage that handles lots of transactions for professional investors. Marshal said:

 “The short trades are almost exclusively put on by traditional hedge funds in the U.S. and Europe, while crypto firms—especially those based in Asia—have been happy to facilitate the other side of the transactions.”

Genesis Global had around $14.6 billion in active loans as of Quarter 1 of 2022, and 48% of its assets were held in the USD or stablecoins.

Discuss this news on our Telegram Community. Subscribe to us on Google news and do follow us on Twitter @Blockmanity

Did you like the news you just read? Please leave a feedback to help us serve you better

Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.