Arthur Hayes, co-founder of BitMEX, has reignited scrutiny around Tether (USDT). In a recent X post, he asserted that the stablecoin issuer is engaging in large interest rate trades and highlighted potential vulnerability to falling rates. Hayes argued that declining positions of gold and Bitcoin (BTC) held by Tether could result in substantial equity losses, potentially leading to USDT’s insolvency. However, Joseph, former Citi analyst, countered this claim. He explained that Tether discloses reserves only as part of a matching philosophy, not reflecting the entirety of their assets. He asserted that the company holds additional corporate equity, including private investments and mining operations, which generate profits and contribute to overall stability. Furthermore, Joseph highlighted Tether’s profitability, citing approximately $10 billion in earnings since 2023 from its exposure to US Treasury securities yielding around 4%. The controversy intensified when Paolo Ardoino, Tether CEO, responded to Hayes’ accusations. He dismissed the claims and emphasized the company’s robust financial standing, citing a multibillion-dollar excess reserve buffer and nearly $30 billion in group equity. Ardoino further highlighted significant stability through recent market fluctuations. This incident marks a significant conflict between an influential voice in the crypto community and Tether’s stablecoin issuer.