Many people think that Tether is nothing more than a fraud perpetrated by Bitfinex. But still the facts are not entirely clear, so let’s see them together.
First of all, Bitfinex and Tether are thought to be the same entity, and so the same people are coordinating everything.It also seems that Tether is printing USDT tokens out of thin air, then issuing them on Bitfinex in order to push the price of BTC and other tokens related to USDT, manipulating the entire market.
Tether Some people also believe that Bitfinex doesn’t have enough funds to cover all the deposits. In the light of these allegations made by the crypto community, let’s try first to understand what Tether is.
Tether (USDT) is a token created on the bitcoin protocol and distributed through the Omni platform. The main purpose of creating Tether was to have a currency that could maintain a fixed 1: 1exchange rate with the dollar.
This could allow trading platforms to make crypto deposits according to the dollar value without using fiat currency. Some of Tether’s richer wallets in fact belong to major exchanges.
First of all, Tether’s problem is not new, it’s been months already that the whole crypto community wondered what was happening between Tether and Bitfinex, especially after some articles by an anonymous Twitter account, @Bitfinexed, who constantly denounced the infamous practices of Bitfinex through the constant emission of new Tethers.
The most critical moment, however, came on November 19, when the Tether team announced that a hacker stolen $ 30 million from their main deposit treasury account. It also appears that some of the addresses of these stolen Tethers are linked to a previous hack to Bitstamp, as some have reported on Reddit.
Anyway all the transactions on the Bitfinex platform have not stopped in the light of these facts. But still many people many are concerned that some of these centralized exchange platforms can pose major risks to the entire market.
If these allegations were true, an entity such as Bitfinex, where some of the major daily crypto transactions are being recorded, should it be blocked by the authorities, would have a very severe impact on the entire market. But the real facts are not yet clear.
Bitfinex CEO, Jan Ludovicus van der Velde, has publicly stated that the financial situation of Bitfinex has never been so solid, rejecting any allegations of market manipulation or lack of funds to cover Tether’s emissions.
Everything is still to be seen.The cryptocurrency market is still very young and the regulations are not yet completely defined. It’s only since 2017 that the interest in blockchain technology has increased so much. We will have to wait a bit longer in order to see how all the regulations will take place.