Tether Limited’s chief technology officer Paolo Ardoino today addressed what he called “open and coordinated” attacks by some hedge funds on USDT.
According to Ardoino, the attacks aim to bring down the stablecoin’s parity with the dollar.
In this sense, Ardoino says that the attacks are an attempt to spread another wave of fear in the market. Something similar to what happened in the case of the collapse of the stablecoin UST and the Terra network.
Attacks on USDT Will Not Succeed
In a long discussion in twitter Ardoino explains the dynamics behind the “open attacks” against USDT, which he says are coordinated by hedge funds that have collaborated to damage USDT liquidity.
In this sense, the funds would be selling USDT and causing the stablecoin parity to fall. The funds then repurchase the currency, making a profit on this arbitrage.
To carry out this strategy, Ardoino accuses the funds of spreading fake news. For example, that USDT’s reserves are not 100% dollar-backed, or that Tether has or has had exposure to high-risk securities, such as those of Chinese developers.
The CTO claims that this news is false and is intended to cause fear in the market. Ardoino also noted that the company seeks to increase its transparency and its “commitments to gradually eliminate exposure to high-risk securities.
Tether wants to increase its stake in safer reserves such as US government bonds. In this sense, the company reduced its exposure to high-risk securities from US$ 45 billion to US$ 8.4 billion.
USDT loses space
According to CoinMarketCap, USDT is still the world’s largest stablecoin by market cap. However, the stablecoin ran into trouble and even lost its parity with the dollar during the market crash.
At the same time, USDT’s market value has been steadily falling. This indicates that there are more people redeeming their holdings, testing the liquidity of the stablecoin.
For now, Tether has honored withdrawals and paid redemptions on time. But the looting grew in ever greater proportions. In the last three months, USDT’s market cap has dropped from $82 billion to $66 billion.
As a result, the market began to favor USDC stablecoin, issued by Circle. The stablecoin was the only one that did not lose its parity with the dollar, and the market cap grew from $52 billion to $56 billion.