Tether’s Ardoino accuses hedge funds of attack on USDT

Paolo Ardoino believes that a group of unnamed hedge funds launched a coordinated attack on the biggest stablecoin by opening short positions en masse and deliberately spreading FUD.

A stock photo of a man in a hoodie pulling strings of a puppet.

In his Twitter thread, Paolo Ardoino described that attackers targeted Tether borrowing hundreds of millions in loans to short USDT. To increase pressure, they utilized several strategies, including USDT/USD perpetual contracts, spot short selling, and DeFi pools unbalancing, all to trigger massive outflows and the eventual depeg that would allow them to buy tokens at a much lower price.

At the same time, the attackers were amplifying and directing disinformation spread by the organized troll networks. FUDsters claimed that Tether issues coins from thin air without being 100% backed and has exposure to the insolvent company Evergrande and Chinese commercial papers. Ardoino dismissed all allegations and pointed out that Tether processed $16B worth of redemptions in a month, proving that its structure is solid and reliable.

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Ardoino also added that Tether reduced its commercial paper exposure from $45B to $8.4B and rolled expiring CPs into US Treasury bills, making its portfolio “stronger than ever.” He reminded his followers how several hedge funds, considered by many the heroes of the industry, found themselves on the brink of bankruptcy due to the enormous risks they were willing to take, probably referring to the infamous Three Arrows Capital.

Tether’s position as the number one stablecoin in the world was shaken after the Terra collapse when it briefly depegged to $0.94 while Binance USD (BUSD) and Coinbase USD (USDC) were trading at a premium. In a push for more transparency, Ardoino recently announced that Tether was preparing for the full audit of its reserves, working with an auditor in the top 12, but not the top four.