Forensic financial research firm Hindenburg Research has put up a million-dollar reward for any undisclosed details surrounding the reserves of the world’s most popular stablecoin.
“We have doubts about the legitimacy of Tether, so today we announce the Hindenburg Tether Bounty Program.”
On Oct 19 the firm stated that despite Tether’s repeated claims of transparency, its disclosures around its holdings have been opaque.
What’s backing USDT?
The research firm stated that ever since Tether claimed its status as a stablecoin, it has revealed that it is only partially backed by USD and the rest of its reserves are crypto and commercial paper issued by unnamed counterparties.
Hindenberg is that keen to find out what is behind Tether that it has put one million dollars on the line for the bounty program.
It cited a Financial Times article from June that suggested Tether’s claims would make it one of the largest holders of commercial paper in the world. Hindenburg Research founder Nathan Anderson stated:
We feel strongly that Tether should fully and thoroughly disclose its holdings to the public. In the absence of that disclosure, we are offering a $1,000,000 bounty to anyone who can provide us exclusive detail on Tether’s supposed reserves.
Tether has come under increasing scrutiny lately with the U.S. Securities and Exchange Commission chair Gary Gensler repeatedly referring to it and stablecoins in general as casino chips.
The crypto community has also called out Tether regarding reserves, yet it remains the industry leader.
In late July, Tether General Counsel Stuart Hoegner said that a full audit of USDT reserves could be released in a few months, but it has yet to materialize.
Tether supply is currently at a peak of 70 billion according to its own transparency report. Around 36 billion, or just over half is on the TRON network with the majority of the remainder on the Ethereum network.
USDT supply has grown by 233% since the beginning of the year. Its main rival, Circle’s USDC, has 32.8 billion in circulation and has seen a growth of 740% since the start of 2021. Binance USD (BUSD) is the third-largest stablecoin by supply with $13 billion in circulation.
CoinGecko reports that the total supply of all stablecoins combined is $133 billion and the current daily trading volume is $62 billion with 92% of that being Tether.
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