[stuzenz]

There are some very good reasons not to short tether which are listed at the below link. The source of this is bitfinexed has been railing against tether since 2017 and has been a thorn in Bitfinex/Tether's sides for a long time.

https://twitter.com/Bitfinexed/status/1405037796172222466

It seems there is a fair bit of collusion with some of the 2nd/3rd tier exchanges and Tether. If there is strong short interest it seems that they are willing to pop the price temporarily to wipe out the shorts. If Tether/Bitfinex has $62B and a printing machine it is pretty easy for them to wipe out the other side of a trade they are against.

My above understanding is just thinking about it in terms of what I have read and what I know of short selling equities. If you can take a put position (option) against tether I suspect that could work. Even if your bet was right, you would just have to be concerned the counter-parties survive the fall and that there is liquidity left in the market to close out the trade. Considering how much funny things went on in the GFC in regulated markets I suspect there is a good chance that in the unregulated crypto markets that even the correct trade would quite likely not be honoured if a full meltdown happened.

I was researching this a bit in the last couple of weeks. My current view is that I see Tether/Bifinex as a fraud which is bigger than Madoff and more serious since it is growing and the currency is (at the moment) a key part of the crypto markets infrastructure. Since tether provides the daily liquidity it also plays a levered role beyond what something like the Madoff fraud would have done to the wider markets.