$1,000,000 Bounty Placed For Details On Tether's Backing And Reserve
- Hindenburg places a $1 million bounty on Tether for information on its reserves.
- The announcement is coming less than a week after the stablecoin issuer was slammed with a fine for misrepresenting the true nature of their reserves.
- Tether’s market cap has risen to nearly $70 billion, placing it as the fifth-largest cryptocurrency on the charts.
Tether has had a torrid time in recent months after being slammed with fines and being the subject of several scathing reports. The most recent episode in Tether’s saga is a $1 million reward for anyone that has information on the reserves of the stablecoin issuer.
A Large Bounty For Tether
A short-selling firm, Hindenburg Research is assuming the role of sheriff in the crypto ecosystem, seeking to expose the operations of Tether. It intends to do this through the announcement of a $1 million bounty program for anyone with useful information regarding the true status of Tether’s reserves.
Founder of the firm, Nathan Anderson stated, “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 million bounty to anyone who can provide us exclusive detail on Tether’s supposed reserves.”
This is coming on the heels of multiple sanctions imposed on the stablecoin issuer over misrepresentation of facts. In February, the office of the Attorney General slammed an $18.5 million fine on the firm and entered an agreement for the company’s related entities to cease further activities in New York. “Tether’s claims that its virtual currency was fully backed by the US dollar at all times was a lie,” says Letitia James, New York’s Attorney General.
The most recent sanction faced by Tether was handed by the Commodity Futures Trading Commission to the tune of $41 million for misleading statements regarding its stablecoins. According to Acting Chairman Rostin Behnam, “The CFTC will continue to take decisive action to bring to light untrue or misleading statements that impact CFTC jurisdictional markets.
This is Hindenburg’s first foray in offering a bounty and according to the terms of the offer, individuals must be above 18 years to participate and should not be residents of a country under US sanctions.
Stablecoins Are All Under The Searchlight
It’s not all rosy for stablecoins as they have come under increased scrutiny over the last few months. SEC Chair, Gary Gensler commented that stablecoins are like “poker chips at a casino” and called for the increasing regulation of the asset class. Sen. Cynthia Lummis warned that “stablecoins must be 100% backed by cash” and should be audited regularly.
Several analysts have made calls for the $130 billion stablecoin industry to be regulated like banks while the IMF has advised governments to accelerate the developments of CBDCs to stem their growing influence.
Aside from Tether, Circle, the issuer of USDC is currently under investigation by the SEC after it received a subpoena. USDT leads the stablecoin market with a $69 billion market cap while USDC comes in second place with $32.4 billion.
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