By
Tolu Ajiboye
April 24th, 2024
Tether Chief Technology Officer, Paolo Ardoino has come out once again to address the attempt by some hedge funds to harm Tether through short selling.
Ever known to be very vocal on Twitter, Ardoino said some hedge funds have been targeting the downfall of USDT, the world’s first and largest stablecoin since the collapse of LUNA/UST.
While Ardoino did not mention any specific hedge fund, he claims that these attackers have been borrowing money in the billions to short USDT with the hope of buying back when the price is significantly lowered. The aim for this according to Paolo is to create enough Fear, Uncertainty, and Doubt (FUD), a term used in the crypto ecosystem to depict people’s fear with respect to a protocol’s short and long-term success.
With the sufficient FUD, the pressure to dump USDT might build up in the community thus fueling the slump of the stablecoin which may lose its peg to the US Dollar.
The Tether CTO does not really understand why these hedge funds have been targeting USDT, but noted that there are a series of erroneous beliefs that might be fueling the enthusiasm by these set of funds to harm the stablecoin.
Among the FUD currently being spread includes the belief that USDT is not 100% backed as claimed. He claimed that these bad actors strongly believe that Tether has exposure to embattled real estate firm, China Evergrande Group (OTCMKTS: EGRNF) and that the stablecoin company has as much as 85% exposure to Chinese Commercial Paper (CP).
Ardoino also posited that these hedge funds trying to harm USDT have believed in the fact that Tether has issued its stablecoins from thin air and that those who borrow did not over-collateralize. He believed that despite all the attestations the company has done, the belief that Tether is the bad guy never really goes away.
Paolo Ardoino Highlights Plans by Tether to Stay Afloat
Shunning all these FUD, Paolo Ardoino said Tether will continue to bolster its position as the pioneering and leading stablecoin in the digital currency ecosystem.
In achieving this goal, he said the Tether will continue to chart its exposure level to US CPs in the coming months. While he has always maintained the fact that the company has never stopped its collateralization efforts, he noted that the protocol will work to maintain its strides across the board.
“Tether had/has in fact >= 100% of the backing, never failed a redemption and all USDTs are redeemed at 1$. In 48 hours Tether processed 7B in redemptions, averaging 10% of our total assets, something almost impossible even for banking institutions,” he said via the long Twitter thread, adding that “Tether also reduced its commercial paper exposure from ~45B to ~8.4B and is set to phase it out in full in the coming months. All the expiring CP have been rolled into US Treasury bills, and we’ll keep going till CP exposure will be 0. Tether portfolio is stronger than ever.”