NEW YORK, NY — Hindenburg Research, a forensic financial research firm, today announces it is launching the Hindenburg Tether Bounty Program (the “Program”) – a reward of up to $1,000,000 for information leading to previously undisclosed details about cryptocurrency “stablecoin” Tether’s backing.
Tether is a key underpinning of the multi-trillion-dollar crypto market. Yet despite its repeated claims of transparency, its disclosures around its holdings have been opaque. The company claims to hold a significant portion of its reserves in commercial paper yet has disclosed virtually nothing about its counterparties.
Hindenburg has doubts about the legitimacy of Tether’s backing due to the company’s sparse disclosures.
Tether has been referred to as a “stablecoin” in the crypto space due to the company’s historical claims that it was equivalent to $1 USD and was backed 1-to-1 by “traditional currency” reserves.
Since those claims that garnered it “stablecoin” status were made years ago, Tether subsequently revealed that its coin was backed only by a small percentage of traditional currency, and that much of its backing consists of holdings in commercial paper issued by unnamed counterparties.
Despite multiple regulatory sanctions over its alleged lack of truthful disclosure about its reserves, and despite Tether now having a $70 billion market cap, Tether still refuses to provide transparency to the public on its holdings.
Recent reporting has indicated that Tether’s claims would make it one of the largest holders of commercial paper in the world. But major trading desks stated to the press that they had never worked with them or seen them in the market.
Hindenburg’s program enables users to submit information on Tether’s backing to Hindenburg for a chance to earn rewards in an amount up to $1,000,000, the (“Bounty”).
Hindenburg Research founder Nathan Anderson said: “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 $1,000,000 bounty to anyone who can provide us exclusive detail on Tether’s supposed reserves.”
Securities and Exchange Commission Chair Gary Gensler said in September of this year that stablecoins were acting as “poker chips” at the crypto Wild West “casino gaming tables”.
Gensler said he feared that: “[the SEC will] keep bringing these enforcement cases but there’s gonna be a problem, on lending platforms, on trading platforms, and, frankly, when that happens…a lot of people are going to get hurt.”
Hindenburg Research seeks to help advance the public’s knowledge of what it believes is a growing threat to investors by encouraging disclosure related to a crucial part of the crypto markets, which are nearing “systemic” size.
The full terms and conditions of Hindenburg’s Tether bounty program can be found here and should be read closely by anyone considering submitting information to the program.
Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.
Hindenburg Research is a research firm that specializes in forensic financial research. The company’s experience in the investment management industry spans decades, with a historical focus on equity, credit, and derivatives analysis.
Hindenburg uses fundamental analysis to aid its investment decision-making and believes the most impactful research results from uncovering hard-to-find information from atypical sources. In particular, the company specializes in uncovering accounting irregularities, questionable management, undisclosed related party transactions and illegal/unethical business, financial reporting or disclosure practices.