USDT Archives - 2100NEWS

Luka GlogoskiMarch 29, 2018

3min988

Tether continues top stir up controversy as it cancels its audit and issues $300 million more worth of tethers.


 

The thing with Tether is that it’s supposed to be backed up by US dollars in a one-to-one ratio. But no one has actually been able to confirm that those dollars in fact exist in their bank account since there has never been a successful external audit completed.

Additionally timing of Tether issuance has had a suspicious effect on Bitcoin’s price. It always seemed to coincide with Bitcoin’s price increase, usually at times when Bitcoin was falling in value, leading some to suspect marker manipulation.

Funny enough this has happened again last week as the price of Bitcoin rebounded by 6% shortly following the issuance of $300 million worth of Tether tokens.

Anonymous blogger Bitfinex’ed, who is no fan of Tether – or associated exchange Bitfinex –  to put it mildly, posted on Twitter at the time that the release of such a large amount of Tether once again caused an increase in Bitcoin’s price.

https://twitter.com/Bitfinexed/status/976179019191410688

Pantera Capital chief investment officer Joey Krug expressed concerns back in January 2018, that these rallies had led to Bitcoin’s price rise to an all-time high of $20,000 in December of 2017.

“This became more and more concerning, because every time the markets went down, you have seen the same thing happen. It could mean that a lot of the rally over December and January might not have been real.”

Even the creator of Litecoin, Mr SatoshiLite himself, expressed concerns around the matter all the way back at the end of November 2017.

Still No Audit

Despite all this criticism and many promises, Tether have still not completed an external audit of their accounts, which would easily dispel their critics’ claims of financial impropriety.

The reasons given by Tether for not completing their audits have been shaky to say the least. Since 15th September of 2017, when their accounts were last checked and confirmed to match the issued tokens at $442 million, there has been no further confirmation of their fiat reserves.

In theory Bitfinex exchange who issue Tether, make enough profit through trading and lending fees, to have enough cash reserves to cover the issued Tether tokens, however until we see a full independent audit completed, doubt will remain. And doubt is the last thing we need in these volatile crypto markets, so hopefully Tether will provide a full and transparent audit soon.


Gabrijel ŠerjakFebruary 2, 2018

3min539

Sister companies Tether and Bitfinex received a subpoena from the United States Commodity Futures Trading Commission on the 6th of December, it has become apparent that over 775M of Tether was created after the date of the subpoena’s delivery. This has deepened the mistrust of Tether and has impacted the Bitcoin price quite dramatically. Wich, we predicted on January 26th.

There was suspicion for quite some time now, it started in March when Bitfinex and Tether’s loss of banking partners. Since February 2017, the number of USDT in circulation has grown by nearly 9,000%. It rised from approximately $25 million USD at the start of February last year.  At the end of January 2018 it was more than $2.25 billion according to Coinmarketcap.

Many have argued that Tether since December 6th may have been produced without USD backing. It may have traded on Bitfinex’s exchange to drive the price of BTC and other cryptocurrencies to record highs. Then dumping them before the public could learn about the subpoena’s existence.

Accusations of insider trading have consistently hounded Bitfinex throughout its lifespan. In early 2013 an apparently disgruntled former Bitfinex employee leaked an email correspondence between himself and the former CEO of Bitfinex, Raphael Nicolle. In the email, the employee alleges that the trading account for Bitfinex’s current Chief Financial Officer, Giancarlo Devasini, “was credited one million dollars, money that he didn’t have deposited in his account.”

The statement issued by Bitfinex and Tether regarding the CFTC subpoena claims

We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests.

 

 


Gabrijel ŠerjakJanuary 26, 2018

5min448

Teather is unique cryptocurrency, it’s like a bridge between crypto and fiat. The idea behind Tether is for every 1 Tether that exists there is 1 USD to back it up. It is sitting in reserves somewhere in Tethers bank accounts, always ready for the redeem at  1:1 ratio.

This makes Tether basically digital cash bypassing financial institutions and regulations. Money build for internet is perfect for traders and individuals trading cryptocurrencies, exchanges, and blockchain companies.

So far so good, but here is the tricky part. They started to print a lot of new Teather without proof of US dollar backing it. If in the near future it is found out that the newly printed tether doesn’t have 1:1 USD backup there will be a major problem.

How can this effect Bitcoin and crypto market?

Tether sends minted USDT directly to Bitfinex. It’s unclear what exact transactions take place with them after. What we know is that once these USDT enter the Bitfinex exchange, the price of bitcoin jumps. That has happened multiple times recently. That means it’s likely they use the new tethers to buy bitcoin. As demand for bitcoin surges, its price goes up, investors see that and want to get in on it, people buy more bitcoin, and the cycle continues. If there is no real USD backup of Tether they pump these prices artificially. That means that when people find out about that there will be a massive dump in a price ob bitcoin from 30 – 80% and the whole crypto market will be crashing as well.

Bitfinex and Tether are essentially sister companies with overlapping ownership between the two

It was confirmed via the Paradise Papers — confidential electronic documents relating to offshore investments that were leaked to the public in Nov 2017, that Bitfinex and Tether are essentially sister companies with overlapping ownership between the two.

This confirmed long-held suspicions that a relationship between the two existed because whenever new USDT is printed out it is often sent straight to Bitfinex.

Summary of Tether investigation report

  • Author’s opinion – it is highly unlikely that Tether is growing through any organic business process. Rather that they are printing in response to market conditions.
  • Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied occurred in the two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet.
  • Bitfinex withdrawal/deposit statistics are unusual and would give rise to further scrutiny in a typical accounting environment.
  • If there is questionable activity, the author believes a 30-80% reduction in BTC price could be forecast.

You should know that this can be a game changer. If it turns out to be true if you are trading or investing in the crypto market keep that in mind. Keep yourself informed and up to date always, be ahead of the crypto game.

 

 



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