Tether’s Controversy Surfaces Again As It Prints 50 Million USDT
One of the most controversial cryptocurrency projects at the moment is Tether.
The stable coin project has been at the center of price manipulation allegations over the past few months and that doesn’t seem to be going away anytime soon.
Tether’s controversy still remains
As a stable coin, the value of Tether’s USDT is inherently tied to the value of one U.S. dollar, and according to the company, is backed by legitimate reserves.
The coin USDT is been used by some traders as a means of finding solace in a bear market.
Traders can trade their altcoins or Bitcoin for USDT, in an act fittingly named “tethering”, in an effort to maintain the dollar value of their holdings.
The coin has risen rapidly and is now the 9th largest cryptocurrency in terms of market cap. That hasn’t stopped people from being skeptical about the funds behind the project, with Tether slow to present the documents that reveal that it holds $2.5+ billion in its reserves.
Tether which is linked to the leadership of cryptocurrency exchange Bitfinex earlier this year fired its auditors. It later showed some documents which suggest that there are funds that back 100% of USDT tokens.
That move subsequently allayed fears about its USD reserves. However, USDT is still a controversial cryptocurrency in the cryptocurrency world.
Reports surfaced that researchers claim the USDT was used in pushing the price of Bitcoin throughout last year. The research paper which originated from the University of Texas claims that USDT was used to artificially inflate the price of Bitcoin during a sharp decline in its price.
Asides the price manipulation fears, the technical concern is something the cryptocurrency community worries about. SlowMIst, a Chinese crypto-centric cybersecurity team reported that an unnamed crypto exchange falsely accepted 694 USDT tokens in a “double spend” attempt.
This revelation caused the crypto community to panic, with some of the view that the entire crypto community would collapse.
Popular cryptocurrency exchanges and an Omni developer came out to assure the public that the issue wouldn’t affect all USDT tokens, citing it as a case of poor exchange integration.
Even though the fear of USDT crash has subsided, it is still regarded by many as one of the most controversial projects in the crypto space.
Tether prints 50 million USDT
Over the weekend, with the bear market hitting the prices of Bitcoin and others, the Tether organization issued $50 million new USDT tokens.
This information was revealed by the Omni block explorer (Omniexplorer), which helps track Omni-based assets, such as USDT tokens.
This latest funds pumped into the market means that Tether now has a $2.4 billion market cap, which saw it became the 9th largest cryptocurrency in terms of market cap.
Charlie Lee, the founder of Litecoin and a popular cryptocurrency figure in a previous Tether issuance noted that the printing of USDT likely is a bullish sign. He tweeted that:
Generally, this has been a precursor of price going up. Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto. This is similar to someone depositing $250MM to exchanges. Of course, that doesn’t mean they will buy right away. DYOR
ALERT: Tether has just granted 250,000,000 USDT https://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC3AgWkj9FMo5LsPTW1zBTwXL … – Mon Jun 25 14:06:13 2018
The usual pump didn’t happen this time around though. The market continued lower following the USDT print instead of seeing a healthy 2-3% move upwards as noticed in the past. This time around, investors and traders were left surprised.