https://hindenburgresearch.com/tether/Hindenburg has doubts about the legitimacy of Tether’s backing due to the company’s sparse disclosures.
Tether has been referred to as a “stablecoin” in the crypto space due to the company’s historical claims that it was equivalent to $1 USD and was backed 1-to-1 by “traditional currency” reserves.
Since those claims that garnered it “stablecoin” status were made years ago, Tether subsequently revealed that its coin was backed only by a small percentage of traditional currency, and that much of its backing consists of holdings in commercial paper issued by unnamed counterparties.
I believe that today nobody imagines that Tether is really 1:1 USD. But I believe that this attempt is not just for someone who wants to drop the price, but rather to better understand the environment before entering. Exchanges that use Tether should have a Legal liability.
