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Hedge Fund Fir Tree Bets Big With Short of Stablecoin Tether

  • Tether has faced scrutiny over reserves it holds against coins
  • The $4 billion firm predicts the bet could pay within a year
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Fir Tree Capital Management is making a substantial short wager on Tether, the stablecoin that’s under intense scrutiny from regulators.

The $4 billion hedge fund, founded by Jeff Tannenbaum, constructed a way to short Tether in an asymmetric trade, meaning the downside risk is small and potential to make money is great, according to clients of the firm. That’s a feat that other firms have struggled to figure out.