A quick 3min read about today's crypto news!
The investment research firm and short-seller Hindenburg Research has offered a USD 1m reward for information on how the tether (USDT) stablecoin is actually pegged to the United States dollar, and data on how Tether’s deposits actually work. In a strongly worded response, Tether called the “bounty” “cynical,” and called Hindenburg’s announcement “a pathetic bid for attention.”
Hindenburg, which has previously targeted the likes of the Chinese automaker Kandi and the healthcare provider Clover Health among other major firms, claims that it had “doubts about the legitimacy of tether” – which was recently the subject of what it labeled an “outlandish” report from Bloomberg Businessweek.
In its own statement, Hindenburg wrote that it had decided to make the offer “due to the company’s sparse disclosures.”
It also spoke of a “growing threat to investors” and “encouraged disclosure” related to what it called “a crucial part of the crypto markets, which are nearing ‘systemic’ size.”
On Twitter, though, Tom Schmidt, a Partner at Dragonfly Capital, quipped that if anyone had “strong evidence that tether is unbacked, there’s a bounty out there” that is “much larger than USD 1 million.”
Tether wrote that “everyone” could sense Hindenburg’s “opportunism as bitcoin (BTC) approaches another all-time high” – a feat BTC has achieved since the stablecoin operator penned its response.
“This is not the first time Hindenburg Research has orchestrated an apparent scheme in pursuit of profit. Nor will it be the last. Tether abhors and denounces their actions and transparent motives.”
The firm’s research and reports have led to bitter legal battles, with many of the firms mentioned in its claims taking legal action – with decidedly mixed results.
A Google search returned the following popular query.
Some prominent crypto advocates, though, questioned the ethics and the timing of Hindenburg’s move.
A respondent wrote that a “humanitarian crisis” could ensue if USDT were to “collapse.”
The Crypto Law Review, however, claimed that framing uncertainty about Tether the company and the USDT stablecoin as a crypto-specific issue was disingenuous, writing:
“The crypto law problem is a reality in ‘many areas of American life.’ But why let reality get in the way of framing this as crypto’s law problem?”
____Learn more: - Tether Hits Back at 'Outlandish' Report as USDT 'Mystery' Continues- Countries Should Prevent 'Regulatory Arbitrage' for Stablecoins – FSB- Stablecoins Reign Among Top Coins: Why and What It Might Mean- Skeptics Keep Tether Busy Despite Latest Transparency Round- After Three Years, Circle Reveals USDC Reserves- USDC Operator Happy After Yellen Calls Stablecoins ‘National Security’ Concern