According to a June 27 report by The Wall Street Journal, Paolo Ardoino said hedge funds have short bets on Tether's stablecoin USDT via the criptocurrency brokerage Genesis Global Trading.
The article cites Genesis Global's head of institutional sales, Leon Marshall, for a commentary on how traditional hedge funds are looking to short TetherUSDT. Marshall said something.
Paolo Ardoino, Tether's CTO, took to Twitter a few hours later to refute hedge funds strategy and rationale for shorting USDT. Ardoino explained the tools being used by traditional finance to short the world's biggest stable coin by market cap.
He went on to claim that hedge funds believe that Tether is a house of cards built on imaginary assets and lies, and are partly responsible for it. He also attested that competitors were spreading via coordinated troll networks to discredit Tether and ruin its reputation. Ardoino stated in Tether's defense :
Following the bank run its assets after the collapse of Terra, the liquidity shown by Tether is unparalleled. U.K. bank Northern Rock saw a run on its assets of just 5% in 2007 and ended up in state ownership after a government bailout.
Tether has absorbed more pressure over a shorter period, but there has been no apparent issues with $16 B withdrawn from Tether over the past month, about 20% of its market cap, and no redemptions have been publicly reported.
The WSJ noted a $16 billion decline in Tether's market cap, currently at $67 billion, but did not comment on whether that has had an impact on Tether's reserves.
Ardoino also highlighted the actions of other financial entities and their investment in projects such as Terra USD stating,
Genesis Global is a brokerage that handles transactions for professional investors. The names of hedge funds placing bets against Tether are not known at this time.
As of Q1 of 2022, Genesis Global had $14.6 billion in active loans, and 48% of its assets were held in USD or stablecoins. The interest in shorting Tether was also mentioned in the report.