Key points to remember
- On Tuesday, Hindenburg Research announced a $ 1 million bounty for exclusive details on Tether’s support.
- In today’s response, Tether called Hindenburg’s reward program a “pathetic demand for attention.”
- The move comes amid continued concerns about the integrity of Tether’s supporting assets.
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On Tuesday, Hindenburg Research, a forensic financial research firm, offered a $ 1 million bounty for information leading to previously undisclosed details about Tether’s support. In today’s response, Tether called the company’s bonus reward program “cynical” and “pathetic offer of attention.”
Tether responds to the Bounty reward program
A day after Hindenburg Research, a financial research firm with a reputation for investigating publicly traded companies, announced a $ 1 million reward program for previously undisclosed information regarding support from Tether, the coin issuer. stable responded with the following statement:
“This Hindenburg Research stunt is a pathetic attempt to grab attention as others make real change and create wealth and results. They try to discredit not just Tether, but a whole movement. Fortunately, everything the world sees through its opportunism as bitcoin nears yet another all-time high. ”
Tether added that this was not the first time that the Hindenburg had “orchestrated an apparent plan in the pursuit of profit.”
In Tuesday’s announcement, Hindenburg expressed doubts about Tether’s support, explicitly highlighting the company’s claims that the USDT is fully backed by a mix of cash reserves and commercial paper. Addressing Tether’s failure to disclose its holdings to the public, Hindenburg Research founder Nathan Anderson said:
“We are convinced that Tether should fully and completely disclose its holdings to the public. In the absence of this disclosure, we are offering a bonus of $ 1,000,000 to anyone who can provide us with exclusive details of Tether’s alleged reserves.
Hindenburg Research has built notoriety for publishing incriminating research on various publicly traded companies and short selling their shares. In late 2017, the company published a series of articles on suspicious Riot Blockchain acquisitions that appeared designed to benefit insiders, which led to a charge of SEC fraud for the CEO of Riot at the time. In 2020, Hindenburg also released a damning report on Nikola Motor Company, a maker of heavy-duty electric vehicles, which led to the company’s founder resigning and sparked SEC and DOJ investigations.
Now, Hindenburg appears to be on the hunt for damaging information regarding Tether’s backing, which seems particularly relevant given Tether’s recent issues with the NYAG and CFTC. According to Tether’s latest “insurance report” released in August, only 10% of USDT issued is cash-backed. The remaining reserves are made up of commercial paper, certificates of deposit, reverse repurchase agreements, treasury bills, corporate bonds, funds and even digital assets.
Hindenburg’s concerns stem from Tether’s failure to disclose the source of these assets, making it difficult to assess the quality or level of risk of its holdings. According to a Bloomberg report released earlier this month, Tether is believed to own billions of dollars in commercial paper issued by major Chinese companies. This has since raised suspicions that Tether may hold debt issued by struggling Chinese real estate giant Evergrande.
The stablecoin issuer specifically denied owning any debt from Evergrande and called Bloomberg’s allegations “misinformation,” but did not clarify exact details about its debtors.
Disclaimer: At the time of writing, the author of this article owns ETH and SUSHI.
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