Top line

Wall Street investment firm Hindenburg Research, the short seller who helped launch regulatory investigations into multi-billion dollar firms Nikola and Clover Health, said Tuesday that it is offering a $ 1 million reward for information not previously available announced details about the financial reserves of the cryptocurrency Tether lead and increase the potential review of the so-called stablecoin, as the supervisory authorities warn that the practically unregulated tokens could endanger financial stability.

Important facts

Hindenburg announced the launch of its tether bounty program on Tuesday evening, noting that the company “claims to hold a significant portion of its reserves in commercial paper” but has known “virtually nothing” about its counterparties or the individuals and companies given their ties to the company are exposed to a financial risk

“We have doubts about the legitimacy of Tether,” said Hindenburg, adding that it does not hold an investment position in the cryptocurrency, the price of which is tied to the value of a US dollar (hence the name “stablecoin”) to make this easier Cryptocurrency transactions.

Hindenburg’s bounty comes less than a week after the Commodity Futures Trading Commission settled charges with Tether of false or misleading statements about his token, asking him to pay $ 41 million because his tokens are fully backed by US dollars.

The CFTC found that only about 27% of Tether’s reserves were covered by US dollars between June 2016 and February 2019, and said the company had not yet completed a review of its reserves.

In a statement, Tether called the bounty a “pitiful need for attention” and said that Bitcoin’s all-time high on Wednesday served as evidence that “everyone is seeing through”. [Hindenburg’s] Opportunism.”