LTC Price Predicted to Keep Rising After Sparking Crypto Spring — Five Positives from Litecoin
LTC Price Predicted to Keep Rising After Sparking Crypto Spring — Five Positives from Litecoin

Tether News - Bloomberg Confirms Tether Ltd Has Enough Dollars to Back USDT

  • Yuri Molchan
    📰 News

    Bloomberg writers have reportedly been shown Tether bank statements suggesting the company has enough assets to back its USDT and dissolve rumours of being a scam

Bloomberg Confirms Tether Ltd Has Enough Dollars to Back USDT
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For several years, as the Tether (USDT) stablecoin was getting popular on the crypto market, skeptics warned all the time that USDT was most likely a scam, since its only USP was that it is pegged to the USD and could not be backed with a lot of actual funds. Now, Bloomberg News states that these rumours may not have enough grounds.

Tether banking details revealed

Bank statements that a Bloomberg reporter has been given access to demonstrate that Tether holds enough USD on its accounts to back its USDT stock. Several of these numerous statements have been also shown to financial regulators, reportedly. It is still not clear, though, if Tether has enough US dollars to back up every single USDT stablecoin it has issued. Still, presently Tether is becoming more open to the public with its reports than ever before.

As an example, one statement from a Tether bank account demonstrates a balance of $2.2 bln as of January 31. Back then, as reported by CoinMarketCap, there were 2.195 bln USDT in circulation. The same goes for figures regarding autumn last year.

A well-known fact already is that Tether and the Bitfinex crypto exchange are owned by the same top-management team. So the aforementioned documents show cash transactions between the two entities after Bitfinex became the only point for buying and selling USDT in 2017, as reports have it.

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Lots of people in the crypto community worry that USDT could be a fake stablecoin. Thousands of crypto enthusiasts search Google daily and find something about Tether being a scam. New reports state that the coin is not transparent enough. Back at the start of the year, the US Commodity Futures Trading Commission began subpoenas regarding Bitfinex and Tether to see if their stablecoin was properly backed.

Currently, as per Bloomberg, the regulator refuses to comment on the situation.

It is not all that simple

However, it seems like the bank papers that people from Bloomberg have managed to see do not reveal everything. For example, the bank statements do not say where the money that backs USDT came from or where it is now, or how much of it there is at the moment.

These statements were opened for Bloomberg by people not exactly from Tether but who just had access to them. Some government officials confirmed the statements were authentic.

Officials from Tether and Bitfinex declined Bloomberg’s requests to comment on the current balance of Tether Ltd.

Other doubts about Tether

Currently, USDT is taking position #6 on the top-10 crypto list. The coin is engaged in a minimum of 30 percent of all operations with BTC on crypto exchanges. Previously, U.Today also reported that Tether has been acknowledged as the best stablecoin among all that are circulating in the market.

Recently, Tether has also been suspected of manipulating the BTC price last year when, in December, Bitcoin reached an all-time high of $19,500. The US Justice Department is currently busy investigating the matter. Thus, Tether Ltd has not yet been completely cleared from regulators’ doubts.

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Tether News - Three Major Problems Stablecoins Can Impose on Market

  • Yuri Molchan

    It is not all so cheerful about fixed-price crypto coins

Three Major Problems Stablecoins Can Impose on Market
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As of late, the Coinbase announced the listing of USDC (USD Coin) emitted by the Circle startup. Many more similar asset-pegged tokens are emerging. The most popular projects so far, such as TrueUSD (TUSD) and Gemini Dollar (GUSD), are gradually minting more coins and broadening their reach. Meanwhile, the former leader Tether (USDT) is being promptly taken out of the market.

Below are the major troubles that stablecoins may cause for their investors.

Centralized grip

Regardless of what coins are pegged to, they are emitted by one central entity. Everything about stablecoins has been planned in advance, even the code and market behavior. So, the emitter may decide to increase the supply, for one thing.

There is no limit to that, unlike with any other decentralized crypto, such as Bitcoin or Ether, where the supply is limited by the code to imitate money that cannot be harmed by inflation. With stablecoins, however, the supply can be endless.

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Besides, an asset-pegged coin is also a financial instrument which can be used indirectly or deliberately to manipulate the market.

Control over holders’ accounts

When you deal with Bitcoin or Litecoin, for instance, nobody is able to seize your coins unless through a cyber attack. However, the protocols of some coins enable their makers to freeze wallets and the entire balances along the way.

Paxos Coin can do that, and so can USDC. Actually, all stablecoins based on the Ethereum ERC20 standard can be controlled. The same thing can happen with XRP, even though it is not a stablecoin.

This time centralized control can harm each user personally. At present, when any crypto can be considered dangerous and illegal or used for criminal purposes, this is certainly a real possibility to get your balance frozen.

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Attacks against the USD peg

Some of the stablecoins are protected by nothing but their algorithm. This makes them vulnerable to what is similar to a Forex trading attack on a fiat currency. When experts in their craft attack the USD peg of a stablecoin, they can get a certain profit.

If we think of the current withdrawal of USDT from the market, that thing happened out of the blue despite whole months of skepticism before it. Anyway, there can be deliberate attacks against some stablecoins to bring on fluctuation to earn profits.

Numerous Forex experts believe that stablecoins are rather vulnerable to exchange rate attacks and these coins’ teams are not even aware of the fact.

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