Financial investigation company Hindenburg Research said it “doubts the legality of Tether.”
Hindenburg Research has offered a reward of up to $1 million for the data on Tether’s financial reserves that secure the USDT stable coin.
The company claims that the lack of information on the financial backing of the stable coin poses a systemic risk for investors globally.
We are awarding up to $1,000,000 to encourage individuals to help us advance the public’s knowledge of what we believe could be a growing threat to investors.
For full information, visit: https://t.co/MnYzLCfa6j
— Hindenburg Research (@HindenburgRes) October 19, 2021
Hindenburg Research said:
“Tether is the backbone of the multi-million dollar crypto market. However, despite repeated statements from the company about the transparency of stable coin collateral data, disclosure of assets that provide USDT value has not been transparent enough. The company claims to hold a significant portion of its reserves in commercial paper, but does little to disclose its counterparties,”
In response to a proposal from Hindenburg Research, Twitter users noted that $1 million is not enough to provide information compromising a stable coin with a market cap of $70 billion.
The release of the stable coin Tether has long been the subject of scrutiny. In July, the US Department of Justice announced that it will analyze the company’s activities.
In February, the New York Attorney’s Office (NYAG) settled a lawsuit with Bitfinex and Tether. The companies have paid a fine of $18.5 million and will provide quarterly reports on their activities.
In August, auditing firm Moore Cayman published a report according to which about 85% of USDT is backed by traditional currencies.
In addition, the US Commodity Futures Trading Commission (CFTC) recently accused Tether and Bitfinex of making false statements to investors and US citizens about Tether backing.
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