Blockstream Leaders Defend Tether Amid Fraud Allegations, Crypto Community Claps Back
Blockstream Leaders Defend Tether Amid Fraud Allegations
If you follow crypto news, you would know that Tether is enemy number one in the crypto verse as of now. This has been several months in the making and came to a fever pitch when it was revealed that Tether only has 74 percent of its token value stored up in reserves after documents were released following an investigation from New York attorney general's office. This came after it was revealed that Tether and Bitfinex had connived to cover up hundreds of millions of dollars in losses that Bitfinex had suffered from investors by being granted access to Tether’s reserves.
Even before this investigation, they had been suspected o price manipulation and had a reputation of being shady and not transparent with users and the general public. As all of this is taking place and tether is being hit with scorn from the entire crypto community, one set of people seem to consistently be defending it is several of Blockstream's leaders and prominent individuals in the firm.
This was revealed in a series of tweets in which certain people such as one exec stated that any Tether news just makes them stronger and another stating that Tether news doesn't matter and no one outside cryptocurrency enthusiasts understand or even care about it.
While it would seem ridiculous that anyone would even defend Tether at this point, some information shared in the bitcoin subreddit has cast some light on why Blockstream leaders keep defending them from criticism. As one commenter pointed out, Bitfinex is an investor in Blockstream and is the only major exchange that carries Blockstream’s liquid product and as such, the firm has the incentive to continue defending Tether even amid all the allegations and revelations. Some even claim that this is part of their plan to destroy bitcoin along with their allies.
The Cost of a Failure
Once this news hit the airwaves, many called for Tether to be delisted en masse from many exchanges in retaliation for their dishonesty and fraud. However, others have stated that exchanges should not be so quick to delete Tether because it would have a negative ripple effect on the rest of the cryptocurrencies.
While there are other stabelcoins, Tether is one of the most popular stablecoins and sudden destruction of it could have a negative market impact. Instead, they say, Tether should have a slow and steady collapse rather than a sudden one. Either way, the general sentiment seems to be that Tether has been given enough chances to prove themselves by users and have repeatedly betrayed their trust.
It should also be noted that one very sensitive issues for crypto enthusiasts are transparency and honesty towards users as this was one of the major principles that grew the crypto industry in the first place. Many already distrust traditional financial institutions and feel that they should not have to look at crypto institutions with suspicion as well. Regardless of what becomes of Tether both now and in the future, it does go to show that honesty is very important to crypto users and should be maintained by firms within that space.