Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.
From their site they provide an answer (and even a "track record") [1]:
> We look for (...) man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.
Hence it seems they're doing it for the bennefit of the public. So much for the expression "there's no such thing as a free lunch".
[1] https://news.ycombinator.com/item?id=28794377
(not investment advice, educational purposes only)
Hidenburg is a short seller who takes positions in their research. See for instance their short of Nikola. While I'm sure they enjoy being helpful and that there's a reason they choose to engage in a very difficult way to earn a living, when there are easier opportunities available, their motives are hardly a mystery.
You can discount all their talk of helpfulness or assume they're just talking their book, and it doesn't really change anything.
If the news is actually true, this might even be considered a public service (as well as obviously a way to make money).
They probably wouldn’t do until they actually got a tip. Also, they might short crypto-related stocks if that’s easier.
If I do some analysis and reveal some MNPI for myself, it's perfectly legal to trade on that since I do not have a fiduciary duty to any publicly traded firms.
(Contrary to some of the other commenters, you don't have to be an insider yourself to run afoul of the law. If the information is not public and you got someone to leak it to you, for example. https://www.investor.gov/introduction-investing/investing-ba...)
I don't see how that's a valid conclusion to draw. I would say in this case the "market" is completely codependent on Tether, and therefore are willing to overlook red flags until forced to via damage to pricing or legalities.
The market was very confident about Enron, WorldCom, Madoff, WireCard, Greensill, Theranos, WeWork, etc as well.
https://www.reuters.com/world/china/hong-kong-audit-watchdog...
If Tether unravels and brings down the whole cryptocurrency bubble, there are probably more indirect positions that are safer bets?
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages” -Adam Smith
https://www.goodreads.com/quotes/68664-it-is-not-from-the-be...
When Hindenburg publishes equity research, the disclosure is "you should assume that as of the publication date of any short-biased report or letter, Hindenburg Research...has a short position in all stocks (and/or options of the stock) covered herein, and therefore stands to realize significant gains in the event that the price of any stock covered herein declines."
But if they contribute to the unwind of a fraud of this scale, they will go down as heroes.
If Tether tanks -- there are definitely decent proxies out there.