Tether CTO Alleges Hedge Funds Create Pressure To Harm USDT Liquidity

Paolo Ardoino as the Tether CTO alleges hedge funds are creating pressure in the billions to harm the Tether liquditiy so that they can buy back the tokens at a lower price as we can read more today in our Tether news.

The Tether CTO alleges that there are plans to harm USDT liquidity and confirmed that the stablecoin has been the subject of an attack by hedge funds that are trying to short-sell the US dollar-pegged crypto asset. Speaking to his followers on Twitter, the Tether executive was responding to reports that the hedge funds were borrowing millions in loans to short USDT after the collapse of Terra.

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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, troll armies, clowns etc. https://t.co/hhcsgHV1Ow

— Paolo Ardoino (@paoloardoino) June 27, 2022

He alleged that the hedge funds are trying to create pressure to harm the Tether liquditiy with the goal of eventually buying back tokens at lower prices. Ardoino levied accusations that some hedge funds helped spread FUD about the stablecoin. The notion is that it is not 100% backed by issuing tokens from thin air and has exposure to distressed companies and the Chinese commercial paper as well as other narratives that were spread by the competitors over the troll networks.

As a part of his Twitter thread refuting these rumors, Ardoino argued that the company was working with regulators and has increased transparency efforts but noted that the commitment to phase out is here:

“Despite all the public 3rd party attestations, our collaboration with regulators, our increased transparency efforts, our commitment to phase out CP exposure and move into US Treasuries, our settlements, … they kept thinking and suggesting that we, Tether, are the bad guys.”

He argued that Tether never failed a redemption and added that in the past 48 hours, Tether redeemed 10% of the total assets which is something impossible even for a banking institution. He confirmed that Tether reduced the commercial paper exposure from $45 billion to $8.4 billion and intends to clear out the commercial paper backing in the upcoming months. It seems that Ardoino’s comments might not hold back the wave of short-sellers that hope to profit from a decline in the crypto price which is now sitting at $0.998.

Wall Street Journal quoted Leon Marshall as the head of institutional sales at Genesis, saying that there has been an increase in traders shorting TEther via its brokerage platform:

“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.”