FUD attack on USDT, repayment of $7B USDT in 48 hours, clearing 19% of Tether reserves in a month
After the collapse of Terra/Luna, attempts were made by hedge funds to cause further panic in the market. From the very beginning, it really seemed like a coordinated attack.
Instruments: USDt/USD futures (an ideal attack vector offering an asymmetric bid), short selling, unbalancing DeFi pools, … The goal: to create enough pressure in billions, causing a mass of outflows from USDT to damage Tether’s liquidity and eventually buy back USDT$ at a much lower price.
These hedge Funds nurtured FUD:
- allegedly Tether is not 100% secured%
- allegedly Tether had Evergrande papers on the balance sheet
- allegedly Tether had 85% of its balance in Chinese commercial gangs (sharply depreciated)
- allegedly Tether prints unsecured USDT tokens
- allegedly, some companies (such as 3AC, Celsius) borrowed from Tether without collateral
As we have always said, Tether has 100% security of reserves, there have never been unsuccessful repayments, and all USDt are repaid at $1.
In 48 hours, Tether processed 7 billion repayments, which is an average of 10% of all our assets, which is almost impossible even for banking institutions.
In more than one month, Tether has processed 16 billion USDT -> USD repayments (~19% of our total reserves), which proves once again that our operations, portfolio, banking infrastructure and team are reliable and battle-tested.
Tether has also reduced the balance of commercial bonds from $45B to $8.4B and intends to completely abandon them in the coming months. All expiring commercial bonds have been converted into US Treasury bills, and we will continue to work until the balance of commercial bonds is zero. Tether’s portfolio is stronger than ever.
And while the FUD focused on Tether, during the last 2 months of the crypto market’s decline, it turned out that many lenders and hedge funds, considered the holy heroes of our industry, actually took risks that Tether never touched.
In any case, eventually these hedge funds, which have borrowed and sold billions of US dollars, will have to buy them back. What will happen then? Tether is the only stable coin tested by fire under extreme pressure.
Will other stablecoins be able to withstand the same test? Can unprofitable operations go on forever, burning money simply because they have shareholders with big pockets? Any unprofitable company is always at a distance of one round of financing from bankruptcy.
And bankruptcy usually means that, as in the case of MtGox, creditors will have to wait eight years (or more).
Originally published at https://read.cash.