The Block: Cumberland walks back tweet about how top stablecoin could experience depegging

Specialized crypto trading firm Cumberland removed an earlier tweet related to stablecoins depegging.

On Tuesday, Cumberland tweeted about stablecoins depegging and how a leading stablecoin like tether (USDT) undergoing such a process could exacerbate the current market downturn. The firm deleted the post on Wednesday and acknowledged the move in a follow-up post:

Yesterday we tweeted about the concept of a top stablecoin depegging as a possible catalyst for a move lower. In retrospect it is easy to see why the Tweet may have been misinterpreted. Therefore we have removed it.

— Cumberland (@CumberlandSays) June 15, 2022

Cumberland went on to say that it has “no knowledge to indicate that the top two stablecoins are not fully backed and sufficiently liquid to meet redemptions.”

The crypto asset trading firm is within the DRW family of companies, an established principal trading firm with over 25 years of experience working in traditional financial markets, and offices around the globe.

One independent analysis indicated that over $100 million worth of short positions were opened following the tweet. "The Cumberland tweet spooked a bunch yesterday," Hsaka wrote.

"Cumberland likely had his new intern doing the market analysis. Not sure what to say, Tether is well strong," Paolo Ardoino, CTO at Tether said in response to the thread.

The company released an update on its reserves and the rumors that its commercial paper portfolio was 85% backed by Chinese or Asian commercial paper, that trading at a 30% discount.

Tether has come under increased scrutiny following the depegging and eventual collapse of Terraform Labs terraUSD (UST) algorithmic stablecoin in May.

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