Crypto ATM CoinFlip Decides To Delay Buying Tron’s USDT Tether Until Further Clarity Presides
Tether seems to be having a very bad time lately. How could it not be bad, though, when the company has been involved in a major scandal in which money from its vault was used to help Bitfinex (both companies share the same heads).
The scandal broke out after the New York Attorney General made some fraud allegations between the company. Now, instead of holding all the money, Tether is holding 74% of the money its tokens represents and shares from Bitfinex. This has caused many problems for Tether, but also for other companies which would use it as well.
CoinFlip, a cryptocurrency ATM company, was planning to use the new Tron-based version of the Tether USDT tokens on its machines. At the moment, the company has a total of 180 machines spread out in the United States. They allow people to use cash to buy crypto in several crypto-friendly stores.
Now, however, the CEO and co-founder of CoinFlip, Daniel Polotsky, has decided to postpone the plan at least until “the smoke clears out (if it ever does). The court case involving Tether and Bitfinex made it simply too dangerous for the company to be involved with it at the current moment.
According to him, the company wants to make sure that Tether is operating 100% legally before they offer it to their consumers.
Tron Also Postpones Promotion Of Tether Tokens
The Tron Foundation also decided to postpone a $20 million USD rewards program which would be used to promote the new Tron-based tokens. The project would be made together with OKEx and Huobi and the goal would be to convince users to migrate from the Omni protocol to Tron with the promotion.
Justin Sun, the CEO of Tron, has also spoken about the need for more clarity as he explained why the delay in the promotion.
USDT tokens were created to have a 1-to-1 pairing with USD and they have done it most of the time, despite the common complaints that the company simply failed to be more transparent with the value.
However, last week the New York Attorney General Letitia James revealed that Tether loaned more than $700 million USD to Bitfinex, which caused quite a commotion in the market. Curiously, though, the price of Tether has not been severely affected so far, while it was last year when the company actually had the funds.
It can certainly be argued that Tron had the worst timing to start its partnership with Tether. The company issued its USDT tokens back in 2014 by using the Omni protocol and an ETH-based version was released in 2017. The partnership with Tron, however, is very fresh. It was originally announced in March of this year.
According to what the Tron Foundation said at the time, providing a stablecoin like Tether would boost the liquidity of the Tron network and it would help institutional investors and dapps at the same time.
A blog post dated April 2 affirmed that a stablecoin would help Tron to create a dapp ecosystem that would work in a more similar way to USD, so investors would be more familiar with it and volatility would be way lower.
At the moment, Tron has issued 137.9 million USDT tokens using its own network. The Omni protocol still has more than 2 billion tokens and it is the dominant technology, but Tron was starting to get more familiar with using Tron when the news broke out.
Only one day before the news broke out, Sun was talking about USDT during a live conference, affirming that each USDT token was backed by USD, so really, it was the worst timing ever for the Tron Foundation.
After that, the company only affirmed that all Tron USDT tokens were backed by fiat and that they would not talk about private negotiations between two private parties.