Tether (USDT) is a long-standing stablecoin. Historically, its price remained at around the dollar mark, but today it’s closer to $0.90. Its reputation has repeatedly come into question, leading to a massive withdrawal of investors.
As a stablecoin, Tether (USDT) alleges to be backed by the USD
However, some aren’t so sure. And though Tether addressed the allegations, they are yet to provide any concrete evidence. The main concern for many is that Tether’s CEO is also head of the popular exchange Bitfinex. All newly released USDT tokens go straight to that platform. Accordingly, some believe Tether (USDT) may be a ploy to artificially boost the value of Bitcoin (BTC).
In January, Bloomberg reported that the U.S. Commodity Futures Trading Commission had subpoenaed both Tether and Bitfinex
Allegedly, they did so to investigate whether the currency is indeed backed 1:1. Therefore, they want to determine if Tether (USDT) actually has the cash in their accounts. Currently, there’s around $2.5 billion’s worth in circulation.
Bitfinex responded that they “routinely receive legal process from law enforcement agents and regulators conducting investigations,” and they declined to comment. The CFTC did not release the results of their investigation. Or to be more precise, they neither confirmed nor denied that the investigation took place.
Bitfinex posted on Medium last week to address the accusations
No doubt they have an ear to the ground regarding some of the public opinion. They tried to reassure traders, saying that despite the price change, withdrawals are going through as normal. There was a temporary restriction on fiat deposits for some users. Therefore, this possibly helped to mitigate the situation, but the downward trend continued.
It doesn’t help that both Tether and Bitfinex are a little mysterious about their identities. They did not reveal which banks they partner with. Furthermore, they only disclosed a few during a legal matter with Wells Fargo. They don’t reveal on their websites or on other public platforms who is in charge, or that Jan Ludovicus van der Velde is the CEO of both. Basically, individuals snooped this fact and made it public.
Meanwhile, major currencies on the other hand have seen around a 7% rise in the last 24 hours
Most analysts agree that the rapid withdrawal from Tether (USDT) means that people are channeling into the other big coins, accounting for the change we see.
Moving forward, Tether (USDT) may have to improve their transparency in order to regain people’s trust and bring their value back up.
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