Tether Mints $150M USDT, Crypto Twitter Screams Scam While Bitfinex Says ‘Authorized Not Issued’
- Tether Ltd., the company behind the world's largest stablecoin, USDT, has again been accused of market manipulation.
- Previously, Tether's management had revised its terms and conditions regarding the issuance of its stablecoin, as it noted that USDT is not fully backed 1-to-1 with the USD.
Tether Ltd. Releases Bank Statements, Showing Proof that It Has Enough USD to Back USDT in Circulation
Tether is one of the most popular stablecoins in existence and is also a very controversial one and it has been involved in several scandals over the last few years. Since it gained popularity it had been accused of being a manipulation tool for the price of bitcoin and had also been accused of lying about its claim of backing up all their tokens with US dollars.
They reinforced their claim of packing up all their tokens and in 2018, they released official bank statements showing that they had the equivalent amount in reserves.
This did not do much to quell speculation and in 2019 Tether and Bitfinex were both under investigation from the New York attorney general's office.
The investigation from the attorney general's office revealed that not only did Bitfinex and Tether hide millions of dollars in losses but only 74 percent of Tether tokens are actually backed up with US dollars, which confirms the rumors that have followed them for a long time.
They have barely recovered from the after-effects of the most recent scandal and now they have found themselves again under suspicion, this time due to the printing of an unusually high amount of tokens. It was revealed on June 11, 2019, the Tether has printed 150 million USDT.
In reality, the printing of tokens is not an unusual act by a stablecoin issuer but because it is Tether in question, there has been speculation that they are preparing for yet another bitcoin price pump.
As soon as this was made public, social media was set ablaze with rumors and speculation but the management of Tether and Bitfinex have come out to calm the rumors. Paolo Ardoino, the CTO of Bitfinex, has stated that the new USDT was authorized without issue. The 150 million USDT tokens were sent to the company's treasury account and they will be used to prepare their future issuance request.
Furthermore, it has been stated that because the tokens in question are yet to actually be issued they cannot do anything to affect the price of Bitcoin as much as people would like to believe. In the meantime, the price of Bitcoin surpassed $8,000 with a 6 percent increase.
Not Off the Hook Yet
This incident goes to show just how damaging the reputation of Tether is that an activity that is usually rather common in the crypto world immediately sparks suspicion of some sort of fraudulent activity.
Then again it must be kept in mind that the crypto community is a rather thorough one that does not forget incidents such as the various scandals easily and both Tether and Bitfinex would have to do a lot in order to regain the trust of consumers.
One advantage they do have is that before they had their various scandals they were able to establish themselves as perhaps the biggest stablecoin on the market and as such, they have not been entirely discarded by investors or everyday users.
For now, it is unknown whether or not another stablecoin can come in and displace Tether or whether these endless scandals and speculations will have a final effect on their bottom line and eventually lead to their downfall.