Hedge funds that chose to expose USDT after the Terra crash “do not understand how the cryptocurrency and Tether market works at a fundamental level.” This was stated by the “stable coin” issuer.

Why Hedge Funds Lose Money By Shorting USD₮ https://t.co/Q0RaLJGP7W

— Tether (@tether_to) 28 July 2022

Tether Limited responded to a WSJ podcast discussing USDT collateral concerns and the rationale for shortening it.

For the first time, the publication reported the popularity of such an idea in June. At that time, the company’s CTO, Paolo Ardoino, stated that the company was processing the conversion of 7 billion tokens (~10% of total assets) into fiat money.

On June 18, the stablecoin issuer’s website was subject to a large-scale DDoS attack. back then CTO the issuer excluded the impact of the event on the ability to use positions in USDT.

“The fact that hedge funds see Terra’s collapse as a constructive factor to short Tether represents the asymmetric information gap between crypto market participants and traditional financial institutions.” – wrote representatives of the issuer.

Among other “unreliable reasons” for such actions, the company said:

Recall that in mid-May, USDT diverged from its peg to the US dollar and tested the $0.94 level, but later returned to the pair.

Previously, Tether promised to completely zero the share of the commercial paper in reserves by November at the latest. A year ago, their volumes were estimated at $30.8 billion versus the current $3.7 billion, according to Ardoino.

Learn more about how Tether works in our tutorial flashcards.

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