Small introduction about Tether:
Tether Case, Explained1 -
What is Tether?Tether is a cryptocurrency that represents real currencies in a Blockchain market.
The project was founded in November 2015. It has two tokens USDT and EURT, which were made as analogues of USD and EUR in a Blockchain world. These cryptocurrencies are closely connected with the exchange Bitfinex. At first, Tether was based on the Bitcoin Blockchain system, but in June 2017, the transition to Litecoin was declared.
4 -
What about tokens liquidity and emission?Without any audit information, it cannot be stated for sure.
Despite all the issues described above, the Tether capitalization was growing. It has been growing rapidly, so it means investment flow. But where does it come from? As the official site says reserve holdings are subject to professional audits. However, Tether does not give any names of auditors or companies.
Tether cannot use bank facilities, so where does the company hold its money? Why is the information not known for token holders? What is the real circulation of tokens? The Blockchain community has more questions than answers. Emission can be excessive, which means unbacked tokens.
The pair USDT/USD is presented on only two exchanges: Kraken and Bitfinex. Bitfinex fixed the price of one USDT at a rate of one USD. The volume of these transactions is tiny, so the question about the liquidity is open.
source: https://cointelegraph.com/explained/tether-case-explainedOk, let's go to the article:
The inner workings of Tether have been under constant scrutiny and they’re in the spotlight again after issuing
300 mln new Tether tokens last week. To understand why Tether has been the
subject of controversy for the
past six months, one should remember
how this cryptocurrency works.
According to Tether, USDT tokens are “backed’ by US Dollars in a 1:1 ratio. In the last six months, Tether have been constantly accused of not having sufficient fiat reserves to back the tokens that they periodically issue.
That’s why some industry critics paid special attention to the changes in a price of Bitcoin that have come after the issuance of new Tether tokens. Given that Tether is equal to one dollar, users have been buying various cryptocurrencies with Tether tokens. If these tokens are not backed by an equal amount of dollars, cryptocurrencies prices, in particular, may have been irregularly inflated.
Point proven again?Casting aside speculation on the reserves backing Tether tokens, the issuance of 300 mln new USDT last week once again coincided with a six percent rebound in the price of Bitcoin.
This prompted fresh reactions from critics - with outspoken anonymous blogger Bitfinex’ed leading the charge with another heated tweet. Tether and sister company cryptocurrency exchange Bitfinex threatened legal action against critics in December.
In January 2018, Pantera Capital chief investment officer Joey Krug expressed concerns that these rallies had led to Bitcoin rise to an all-time high in $20,000:
“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.”read more here
well, this seems to be a very serious problem, I have been following this story about Tether for some time, but I would like to hear your opinion on this subject.
A possible collapse of Tether, what would be the immediate effects caused by this possible collapse?
this guy @
Bitfinex'ed, has become a big enemy of the owners of Tether, why? Would not it be easier to do such an audit and end all this noise?
What is your opinion on this story?
PS: I'm not accusing Tether of anything, I just want to better understand this whole story.
