Many investment funds are said to have increased their short bets on the world’s largest stablecoin Tether (USDT) in the context of a severe market decline that greatly confused the community.
USDT is always 100% backed
Things started to explode on June 27, when subjected to too many “hammers” from the public, Tether CTO Paolo Ardoino posted a series of tweets to dissect in detail all the FUD that the company has released the company is facing to strengthen trust in the community is really shaken.
Accordingly, Mr. Paolo Ardoino said that some investment funds are trying to take advantage of the collapse of LUNA-UST to cause further panic in the market through short selling USDT. With the aim of hurting Tether’s liquidity, they will have the opportunity to “collect” tokens in the market at a lower price.
So investment funds have even formed alliances with each other to continuously launch and spread bad rumors that affect Tether’s reputation. Paolo Ardoino claims that allegations such as USDT not being 100% secure, having a “shady” lending relationship with the Celsius platform and the Three Arrows Capital fund, etc., all come from here.
After the LUNA-UST crisis started to steep, the value of USDT temporarily lost its peg severely on most of the popular crypto exchanges. The subsequent consequence was that the total supply of Tether decreased by 7 billion USD in just one week, leading to the community calling for an audit with concerns about the project’s “shady” chain of events in the past that could affect hit USDT harder at the time.
To reinforce public opinion, Tether immediately announced that it had a reserve of 82.4 billion USD, asserting that it was “excessive” to back USDT, but that could not help Tether regain “lost trust” in whales. cryptocurrencies, as they slowly moved to USDC after the de-peg wave.
Perhaps it is because this vulnerability has unintentionally been a strong catalyst for investors to believe that Tether will once again continue to de-peg, combined with the latest announcement from Tether that the company is still doing this. now audited by a little-known audit firm, which has led to mass short action.
Even so, despite everything going against Tether, Paolo Ardoino confirmed that the company is still working cooperatively with regulators in an effort to increase the transparency of USDT, pledging to gradually reduce the amount of commercial paper held in the stock of company assets.
Specifically, Tether will reduce its commercial paper issuance rate from 45 billion to 8.4 billion and is expected to phase it out entirely in the coming months. All expiring commercial paper has been transferred to US Treasury bills and Tether pledges to continue the process until the commercial paper spread is zero.
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