The issuer of Tether (USDT) has said that hedge funds that attempted to short its stablecoin after Terra’s collapse in May are “incredibly misinformed” and “flat out wrong.”
Tether pointed to a June 28 Wall Street Journal podcast in which host Luke Vargas and guest Caitlin McCabe discussed the bearish crypto market and concerns over Tether’s backing assets.
Tether said that the hedge funds, which saw Terra’s collapse as a reason to short USDT, have “a fundamental misunderstanding of both the cryptocurrency market and Tether.”
In early May, UST lost its peg in dramatic fashion and pulled down the price of Terra ecosystem’s native token LUNA – now known as LUNC – to fractions of a cent from over $60.
In that time, Tether experienced a 21% drop in market cap since May 11 from $85.3 billion.
Tether is still the largest stablecoin in the crypto market today with a $65.8 billion market cap, per data from CoinGecko.
In late June, Tether chief technology officer Paolo Ardoino confirmed that USDT had become the subject of a “coordinated attack” by hedge funds looking to short-sell the crypto asset.
Tether also reaffirmed the strength of its financial backing and ability to honor redemptions, reiterating that it holds no Chinese commercial paper and had cut its total holdings of commercial paper by 88% from $30 billion to $3.7 billion over the past year.