Tether CTO Raises Concerns Over Alleged Manipulation of USDT

Paolo Ardoino, the Chief Technology Officer of Tether and Bitfinex, expressed concerns about what he believes are indications of manipulation affecting the USDT stablecoin. In a tweet on August 3, he pointed out that USDT’s value is being pressured down by approximately 10 basis points (0.1% or around $0.99). Interestingly, USDC, a major competitor to USDT, is not benefiting from this situation and is instead being heavily redeemed, while a new competitor is seemingly gaining all the momentum.

Ardoino’s concluding remark was sarcastic, suggesting that the situation seems entirely organic and not manipulative at all.

Evidence from stablecoin data suggests that Ardoino may have been referring to a new stablecoin called First Digital USD (FDUSD) in his tweet. CoinMarketCap data for FDUSD shows a significant increase in market cap, jumping from just $20.25 million on August 2 to its current market cap of $256.55 million.

Financial analyst Adam Cochran added more context through a Twitter thread, explaining that many on-chain addresses are swapping USDT for DAI, and these transactions are being funded by an address with thousands of Ethereum (ETH) coming from Binance. All of these addresses have only been involved in USDT transactions, further indicating the likelihood of artificial market forces being exerted on USDT. The swapping of USDT for DAI started about 100 days ago, and Cochran suggested that the exchange itself might be involved, as it has been under constant attack from spoof phishing attempts targeting exchanges.

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