Ardoino stated on June 27 that he is “transparent about… hedge fund efforts to short Tether” (USDT).
He added that these hedge funds attempted to attain their objective via the use of perpetual contracts, short-selling on spot markets, and the creation of imbalances in DeFi pools.
If these attempts had been effective, according to Ardoino, hedge funds would have exerted billions of dollars of pressure before repurchasing USDT at a far reduced price.
Having failed to destabilize Tether, Ardoino asserts that those firms must purchase back the Tether they borrowed at the coin’s correct $1.00 value or risk bankruptcy.
This month’s liquidity crisis, according to Ardoino, demonstrates that bankers and hedge funds are “taking risks that Tether has never even touched with a ten-foot pole.” Celsius and Three Arrows Capital are in danger of bankruptcy due to unrelated high-risk investing practises, but Ardoino did not mention any specific firms.
Ardoino said that Tether had successfully redeemed $16 billion worth of USDT at full value in more than a month.
Genesis reports that clients shorted Tether
In recent months, rumors of Tether shorting have surfaced from a variety of sources. Today, the Wall Street Journal reported a clear acknowledgment from one company.
The head of institutional sales at Genesis Global Trading, Leon Marshall, asserts that typical hedge funds shorted Tether via his firm. According to him, the related transactions involved “hundreds of millions” of dollars.
He noted that hedge funds located in the United States and Europe seek chances to short Tether, while cryptocurrency businesses in Asia handle the opposite side of the deal.
Unknown are the reasons corporations have opted to short the stablecoin. Shorting Tether, according to Marshall, is a method to wager against the larger economy and growing inflation. In addition, Marshall asserts that investors are compelled to short USDT because of backing fears.
In contrast, Tether asserts that these worries are founded on false information. Today, Ardoino refuted claims about Tether’s inadequate backing, exposure to Chinese commercial paper, and exposure to the defaulting corporation Evergrande.
Tether has already refuted these claims in their entirety. Nonetheless, anxiety around stablecoin, whether justified or not, has probably prompted hedge funds to take risks.
Despite continuous criticism, USDT is valued at parity with the U.S. dollar at the current exchange rate of $1.00.
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