Tether [USDT] to let the crypto world down? – Controversial token in the market
Tether [USDT], which is currently ranked at number 14, has a price which is in a 1:1 ratio with the USD. This is the peculiarity of this coin and has been more or less the same since March 2015. However, Tether has been constantly pestered with banking issues. Tether had also faced an attack on November 19, 2017, which removed $30,950,010 USDT from the Tether Treasury wallet which was sent to an unauthorized Bitcoin address.
Controversies revolving around Tether continues as they issued $300 million tokens, priced at $1, on 20th of March this year. Previously Tether had released 86 million in euro-backed EURT and 61.1 million in US dollar-based USDT on Ethereum’s technology. This resulted in a price hike for Bitcoin and it crossed the $9000 mark on the same day.
The accusation against Tether for the past 6 months has been that the blockchain does not have enough fiat reserves to back the tokens that they issue from time to time. Tether had previously assured that it is routinely audited and announced a transparency update on their website on 15th of September 2017.
They had also assured that they have sufficient reserves to back all of their tokens with U.S dollars. However, no such official audit has been done till now.
This issue was taken up by the Commodity Futures Trading Commission [CFTC] in December 2017 when they issued a subpoena. After which Tether reassigned Friedmann LLP to conduct an audit of its US dollar reserves. But a month later, they broke away from their auditors. Thus no official audit has ever been disclosed by Tether and it remains unfinished.
As per the memorandum attached to the announcement made in September, Tether had $442.9 million reserve in its bank accounts and about 422 million tokens were issued. These details seem to be fair enough but the reports say that Tether was not fully satisfied with the timeframe it was given.
A Twitterati commented:
“Some FUD is legit FUD. This issue is a legit threat. If Tether is a scam, there will be a massive collapse from current levels.”
Another Tweep says:
“I guess this had a relation with Bitfinex move to Switzerland … I think they are looking for more stable banking system to defend them if Tether collapses”
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