A research company named Hindenburg research launched a $1 million bounty to uncover Tether’s real backing after it cast doubts on the legitimacy of the real backing so let’s read more in our latest Tether news.
Hindenburg Research is a research company that announced a reward of up to $1,000,000 for the real details on reserves backing of Tether as the world’s largest stabelcoin. The company said that the Hindenburg Tether Bounty Program aims to uncover the information leading to the undisclosed details about the backing of the cryptocurrency as the disclosures around the holdings were quite opaque. Tether limited, as the issuer of the stablecoin claimed that each USDT is pegged to 1:1 to the US dollar but critics started questioning the claims.
We have doubts about the legitimacy of Tether, so today we announce the Hindenburg Tether Bounty Program, a reward of up to $1,000,000 for details on Tether’s backing.
— Hindenburg Research (@HindenburgRes) October 19, 2021
Earlier this year the company revealed that as of March 2021, about 76% of the reserves were held in cash and equivalents with the remainder of the reserves being allocated to secured loans, bonds, and other investments like Bitcoin. The subsequent assurance report released in August showed that a mere 10% of the stablecoin’s backing came from cash and bank deposits while about 50% of the reservers or more than 30$ billion were held in commercial paper as short-term debt issued by a corporation. The Research company noted:
“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.”
With the announcement of the Hindenburg Tether, the bounty program came on hot steels of Tether being slapped with a harsh fine of $41 million by the CFTC for providing untrue statements about the fiat-backed reserves. As per the regulator, between 2016 and 2019, Tether’s cryptocurrency wasn’t fully backed by US dollars as the company claimed. The stablecoin provider didn’t disclose the fact that it included a lot of non-fiat assets in the reserves. Bitfinex which is Tetehr’s sister company recieved a $1.5 million fine for allowing American residents to buy and sell BTC and USDT without having to register with CFTC. To add to the controversy, the CEO of Celsius Network Alex Mashinsky revealed that Tether is issuing the dollar-pegged coins in the exchange for crypto like ETH and BTC which violates the company’s terms of service.
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]