On June 15, 2023, Tether (USDT), the largest stablecoin by market cap, briefly lost its $1 peg. The token fell as low as $0.9959 on some exchanges before recovering to $0.9999.
In response to the liquidation, Tether issued a statement saying that it is "fully committed to maintaining the stability of Tether's peg to the US dollar." The company also said that it is "working with regulators to address any concerns they may have."
Some people in the crypto community are skeptical of Tether's claims. They believe that Tether is not fully backed by cash reserves and that the company is using other assets, such as commercial paper, to back its tokens. They also believe that Tether is not transparent about its reserves and that this lack of transparency is a major concern.
The USDT sell-off is a reminder of the risks associated with stablecoins. Stablecoins are supposed to be a safe haven for investors, but they are not immune to market volatility. If you are considering investing in stablecoins, it is important to do your research and understand the risks involved.
In a recent tweet, Tether CTO Paolo Ardoino questioned the “timing of events” that led to the liquidation of USDT. He suggested that the selloff was an "orchestrated attack" against USDT.
Ardoino did not provide any evidence to support his claim, but did say that Tether is "committed to transparency and working with regulators to address any concerns they may have."
The USDT sell-off is an important development in the crypto market. It will be interesting to see how the market reacts in the coming days and weeks.