Short-selling research firm Hindenburg Research is offering a bounty of up to $1 million for previously undisclosed details about the reserves backing Tether’s stablecoin USDT.
- The firm said it “has doubts” about Tether’s backing and is launching the Hindenburg Tether Bounty Program to encourage a search for new information about it.
- Hindenburg specifically highlighted in an announcement Wednesday Tether’s claims that a significant portion of its reserves are held in commercial paper without disclosing anything about its counterparties.
- The program will enable users to submit information on Tether’s backing and earn rewards “in an amount up to $1 million,” Hindenburg said.
- Regulatory scrutiny around the reserves that lie behind Tether’s stablecoin USDT and other similar instruments is well established. Hindenburg appears to be lending its weight to the work being carried out at the U.S. Securities and Exchange Commission (SEC) and on Capitol Hill.
- In response, Tether labelled the bounty program “cynical” and a “pathetic bid for attention.”
- “This is not the first time Hindenburg Research has orchestrated an apparent scheme in pursuit of profit. Nor will it be the last. Tether abhors and denounces their actions and transparent motives,” the stablecoin issuer said in a statement.
- Hindenburg Research has in recent years garnered a reputation for uncovering information about publicly traded companies that sinks their share price and invites scrutiny from regulatory bodies. A report in June, for example, that suggested sports betting company DraftKings had potentially enabled black-market betting led to a subpoena from the SEC.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.