Paolo Ardoino, the CEO of Tether, the issuer of USDT, the world’s largest stablecoin by market cap, recently stirred the crypto community with his remarks directed at Digital Currency Group (DCG) amidst their ongoing legal battle with the New York Attorney General (NYAG).
In a recent post on X, Ardoino didn’t hold back as he mocked DCG in light of the latest court documents that surfaced. These filings revealed that the CEO was short “400 million” USDT during a tumultuous period when rumors of instability surrounded Tether following the collapse of the crypto hedge fund Three Arrows Capital (3AC). Concerned about the potential fallout, DCG and Barry Silbert took steps to hedge risks and safeguard their interests.
Reflecting on the events of mid-2022, Ardoino emphasized Tether’s resilience in the face of adversity, contrasting it with the broader meltdown experienced by the crypto industry. He highlighted how Tether managed to weather the storm, redeeming and paying out a staggering $7 billion in just 48 hours, followed by an additional $20 billion in less than a month.
Ardoino reiterated Tether’s commitment to transparency and solvency, assuring stakeholders that each USDT in circulation is fully backed by cash and other reserves, including treasuries. This assurance underscores the company’s ability to honor redemption requests promptly, with over 100 billion USDT tokens available for conversion to cash at any given moment.
In a bold statement, Ardoino dismissed the idea of shorting USDT as anything but wise, especially in light of DCG’s current predicament. With DCG facing legal scrutiny and allegations of fraud, Ardoino quipped that betting against USDT was akin to embracing the ill-fated decision of accepting FTT as collateral.
The collapse of FTX, a bankrupt crypto exchange associated with Sam Bankman-Fried and FTT, sheds light on the risks associated with overreliance on specific assets. Genesis Global, a subsidiary of DCG, had exposure to FTX, underscoring the interconnectedness of the crypto ecosystem and the consequences of strategic missteps.
Ardoino’s comments serve as a reminder of the complexities and challenges inherent in the crypto landscape, where trust, transparency, and risk management play pivotal roles in shaping the industry’s future. As the saga between Tether and DCG unfolds, the broader implications for market stability and investor confidence remain subjects of keen interest and scrutiny.
By navigating these turbulent waters with resilience and foresight, Tether and its leadership aim to set a precedent for responsible governance and sustainable growth in the ever-evolving world of digital assets.