Several hedge funds including Fir Tree Capital Management, Viceroy Research, Valiant, established short positions against stablecoin tether (USDT) during 2022, with others reported to be considering following suit, according to a report by BeInCrypto.

Several hedge funds including Fir Tree Capital Management, Viceroy Research, Valiant, established short positions against stablecoin tether (USDT) during 2022, with others reported to be considering following suit, according to a report by BeInCrypto.

Valiant has since exited its position, citing collateral risk, but according to the report, other hedge funds are considering wagers against tether, believing it is just another of time before the stablecoin runs into trouble. A lack of transparency has led to rumours that tether might have internal liquidity problems, while regulators have also fined it millions for issuing misleading financial statements.

USDT is currently the largest stablecoin by market cap.

The report cites a spokesmen for tether as saying that the hedge funds betting against it are involved in a “clever scheme to raise capital from those less knowledgeable by leveraging on disinformation with the end goal of collecting a management fee.”