Massive USDT sell-off sparks market discussion, Tether CTO hints at possible involvement of Binance in manipulation?

According to a report from Zombit, Tether's CTO, Paolo Ardoino, hinted that the recent selling pressure on USDT and the slight decoupling in the secondary market may have been caused by pressure from competitors, with the community generally believing that the pressure is coming from Binance?

USDT Experiences Heavy Selling Across Multiple Trading Platforms

Recently, the online exchange platforms Curve and Uniswap have seen a large amount of USDT being sold. Particularly in Curve's three-coin liquidity pool 3pool, the USDT balance has surged, accounting for as high as 60%, significantly exceeding the normal 33% level. This pool includes three stablecoins - USDT, USDC, and DAI, with USDC and DAI currently holding about 20% each.

Another important data comes from Uniswap V3's USDT-USDC liquidity pool, where the liquidity of the trading pair is very strong, with the USDT balance reaching $104 million, while the USDC balance is only $7.25 million.

Tether CTO Publicly Questions "Hidden Hands" Behind Manipulation

In response to the above situation, Tether's CTO Paolo Ardoino stated on social media that this could be the work of some "hidden hands" at play. He pointed out that while USDT is facing pressure and its price is slightly decoupled, the main competitor stablecoin USDC is being heavily redeemed. He found it interesting that this phenomenon occurred just two days after the birth of a competitor.

He also mocked those who believe that market behavior is completely normal and not influenced by manipulation. The community widely speculates that Ardoino's accusations are likely aimed at Binance and its recently supported stablecoin FDUSD.

Isn't it interesting that USDt is being pressured down (slightly, within 10bps, just to push market makers to react), and USDc, the main competitor that you would expect being gaining from the situation, is redeemed heavily nevertheless, while suddenly a competitor born 2 days…

— Paolo Ardoino 🍐 (@paoloardoino) August 3, 2023

Market Observers Suspect Binance of Market Manipulation

On the other hand, Adam Cochran, a partner at Cinneamhain Ventures who has had disputes with Binance before, pointed out that some addresses that have exchanged a large amount of USDT for DAI may have their funds originating from the Binance exchange.

He believes that this could be a manipulation tactic by Binance for long-term strategy. Cochran explained that by selling a large amount of USDT, Binance can increase market panic, and by redeeming a large amount of USDC, reduce its market value, thereby eliminating the influence of these two major competitors. The ultimate goal of all this could be to dominate the stablecoin market at a low cost.

Furthermore, he also believes that Binance is collaborating with suspicious offshore stablecoins TUSD and FDUSD, providing free trading and leverage on the exchange to boost their market value, and then using them to buy Bitcoin and Ethereum at almost zero cost.

Cochran sees this plan as a way to eliminate your competitors at a low cost.

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The address that's mass swapping USDT -> DAI is Binance funded and has multiple addresses bulk selling USDT.

It's a long chain of addresses that have been interacting with USDT over the last year.

But goes back to an address funded with 1000s of ETH from Binance pic.twitter.com/wRxTwGpOSH

— Adam Cochran (adamscochran.eth) (@adamscochran) August 3, 2023