Tether Continues Printing USDT With No Proof of US Dollar Backing
Concerns about Tether and its day-to-day activities continue on with suspicions growing that the company does not actually hold dollar reserves equal to the amount of Tethers (USDT) currently in circulation. These suspicions are fueled by the fact that Tether has substantially increased the amount of USDT in circulation in recent months, all without publishing the findings of their most recent audit.
Tether Prints Out Millions of Tethers In Just Days
According to @TetherPrinter, a Twitter account that dedicates itself to tracking the amount of tether grants issued on the Omni blockchain, $400 million USD worth of new Tethers have been issued in just the last 4 days.
Despite announcing in December that they were in the process of performing an audit of their balance sheet, the company has still not published any information about their finances and how it compares to the USDT token balance.
This could be a major problem in the future if it is found out that there is a large discrepancy between their USD holdings and the amount of Tethers in circulation. The entire point of USDT is to maintain a 1:1 exchange ratio with the US dollar, which it achieves by guaranteeing that every tether is redeemable for 1 US dollar.
The Ominous Relationship with Bitifnex
Furthermore, such a discovery would be no great shakes for either Bitfinex or Tether’s public image as it would likely just add fuel to the fire that the two companies were up to something more sinister.
Just recently it was confirmed via the Paradise Papers — confidential electronic documents relating to offshore investments that were leaked to the public in Nov 2017, that Bitfinex and Tether are essentially sister companies with overlapping ownership between the two.
This news, at the time, was a significant finding because there had been long-held suspicions that a relationship between the two exsted and because whenever new USDT is printed out it is often sent straight to Bitfinex. So, what kind of sinister things could these two firms be up to? Well, according to many in the crypto community and Fortune: market manipulation on a grand scale.
Is The Crypto Market Being Artificially Propped Up By Tether?
An interesting thing seems to always happen whenever USDT is printed and sent to Bitfinex.It has been observed on numerous occasions that Bitcoin’s price always seems to rise right after new USDT is deposited into the Bitfinex exchange — which is enough for some to conclude that the USDT is being used to buy Bitcoin.
This new money flowing into Bitcoin causes its price to go up, which then spurs more investors to buy into it and basically causes a snowballing effect that continually forces the price upwards even further.
If Tether has the dollars to back up the USDT its printing, then this isn’t necessarily a problem by itself. However, with 400 million dollars worth being printed out in just the last few days, it seems more and more unlikely that this is actually the case. It wasn’t the case when Tether published the findings of its last audit in March 2017 — when its balance sheet showed a near million dollar discrepancy between its USD holdings and the amount of USDT in circulation.
What do you think of the rate at which Tether is printing out new USDT? Do you think a real problem exists? Let us hear your thoughts.
Images via Tether, watercoolethe.blogspot.com, bitfinex