USD-Backed Crypto Tether Re-Enables Direct Withdrawals of Fiat

Following an announcement from Bitfinex yesterday regarding their newfound “neutrality” to tether (USDT) and intent to use other stablecoins in addition to USDT, crypto firm Tether has revived its former business model of enabling 1:1 redemption of USDT for USD on its own platform.

“Now, thanks to stronger banking as a result of our new relationship with Deltec, Tether is able to return to its original vision of having a wallet for creating and redeeming directly on its own platform without having to rely on a third party. This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon.”

Users who want to cash out USDT at Bitfinex will do so at market rates, rather than 1-for-1, right along with the other stablecoins that are being offered. As we’ve reported in the past, tether occasionally divorces from its dollar peg due to market pressures, sometimes by as much or more than five cents.

Tether also published a rate card regarding the deposits and withdrawals of fiat currency on the platform. To use Tether’s withdrawal system directly, clients will need to be working with more than $100,000, at which size they are charged 0.1% to make a fiat deposit or the greater of $1000 or 0.4% to withdraw. Customers of any size may only make one fiat withdrawal per week. Transactions over $1 million are charged a 1% fee while those over $10 million are charged a whopping 3% – or a minimum of $300,000. Deposit fees are flat, however, at 0.1%, no matter the size.

Traders looking to realize gains will have to determine the best route to do so. There is no fee for moving USDT in and out of one’s official Tether account, so traders will have to develop strategies to maximize the utility of the fee structures at the dozens of places they could potentially exchange their tokens for dollars and/or other cryptos.

On the other hand, newcomer Paxos Standard (PAX) charges no fees. Withdrawals are not instant due to the way Paxos works, but they happen on a regular schedule which is published by the company. They also reserve the right to change their fee structure at any time. Similarly, Circle’s USD Coin (USDC) does not charge a fee for withdrawals. Both it and Paxos have a minimum of $100 for conversions.

Interestingly, on Binance at time of writing, Paxos Standard was trading at a premium against USDT, meaning that a user who wanted to convert from USDT to Pax in order to avoid fees would essentially do so at a 1% fee plus exchange fees. Seems anyway you go, with tether, you’re going to pay.


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Author: P. H. Madore
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US Justice Department Probes Tether for Bitcoin Price Manipulation: Report

The US Department of Justice (DOJ) has reportedly opened a probe into whether Tether, the eponymous issuer of the USD-pegged cryptocurrency stablecoin tether (USDT), has engaged in illegal market manipulation to prop up the bitcoin price.

Justice Department Investigates Tether for Crypto Manipulation

Citing three people familiar with the matter, Bloomberg reports that federal prosecutors — who had already opened a broad investigation into the cryptocurrency market — have narrowed on Tether and Bitfinex, the crypto exchange giant with whom it shares a management team.

Tether, whose crypto token has a circulating supply of 1.8 billion, alleges that every unit of USDT is backed by $1.00 stored in a company-owned bank account. The firm’s current banking partner — there have been almost too many to list — recently published a letter indicating that it was holding enough USD to cover the outstanding USDT, but some lawyers stated that the letter was written in such a way to absolve the institution, Deltec Bank, from any liability regarding its veracity.

Most tethers enter and exit circulation by way of Bitfinex, who always values USDT at $1.00 regardless of its price on the global market. Critics, including researchers at the University of Texas, have alleged that Tether at least occasionally operates a fractional reserve bank, pumping unbacked tethers into circulation to stabilize the bitcoin price and then selling enough BTC to rectify its reserves.

The company has denied these allegations, and industry stakeholders such as Mike Novogratz have said that Tether’s ability to redeem more than $1 billion worth of USDT when the cryptocurrency fell below its supposed $1.00 peg in October is a strong indication that the token is fully-backed by USD. Subsequent research from the University of Queensland Business School further argued that tether grants had no impact on the bitcoin price.

Justice Department, CFTC Will Coordinate Probes

Bloomberg had reported earlier this year that the Commodity Futures Trading Commission (CFTC) had sent subpoenas to Tether and Bitfinex last December, and today’s report indicates that the DOJ and CFTC are coordinating their efforts. Professor John Griffin, one of the University of Texas researchers who authored the paper alleging that tethers are used to manipulate the bitcoin price, is said to have briefed the CFTC on his findings.

Crucially, though, the report notes that, even if illegal activity has occurred on Bitfinex, the exchange operator’s executives may not necessarily be implicated.

“It couldn’t be determined whether government officials are solely investigating activity that occurred on Bitfinex or if exchange executives are suspected of illegal behavior. Neither the Justice Department nor the CFTC has accused anyone of wrongdoing, and authorities may ultimately conclude that nothing illicit occurred.”

It’s unclear to what extent, if any, the Justice Department’s probe into bitcoin price manipulation has put downward pressure on the crypto market, which is now trading below $150 billion after taking $60 billion in losses in just seven days.


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Author: Josiah Wilmoth
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The Race to Replace Tether (In 3 Charts)

The crypto market has a dominant stablecoin, make no mistake.

Tether, which aims to keep its token (called tether or USDT) at parity with the U.S. dollar by backing each token with $1 in bank deposits, accounts for the vast majority of the stablecoin market by total value, exchange volume and other metrics.

But the market has begun to show signs of anxiety around tether, centering on the firm’s access to banking services and its claims to have fully collateralized the outstanding tether supply.

The token has not traded at $1 with any consistency since early October. It hit a low of $0.85 on one market on Oct. 15, and while the exchange rate has largely recovered, it still lags below target, trading at $0.99 Sunday, according to CoinMarketCap.

Meanwhile, several rival stablecoins have arrived on the market, including – just since September – Circle’s USD Coin (USDC), the Paxos Standard Token (PAX) and the Gemini Dollar (GUSD). Older rivals include TrustToken’s TrueUSD (TUSD) and Maker’s Dai (DAI).

As one might expect in such a perfect storm, tether has begun to lose some market share to these competitors in the week and a half since it broke the buck, data analyzed by CoinDesk shows. Yet while TUSD and USDC have made the biggest inroads, the data shows no clear winner at this stage, and tether remains firmly on top.

All these coins are vying for a critical role in the crypto ecosystem. Stablecoins, in theory, allow traders to move money between exchanges quickly – without having to rely on access to traditional banking. They also allow traders to move their funds into a less risky asset during times of heightened volatility, without having to withdraw funds from an exchange.

Below we dive into the data.

Market capitalization

There are several ways to measure market share for stablecoins, none of them perfect indicators. One is simply by looking at the market capitalization, which, when the asset is supposed to trade 1-for-1 with fiat, should be about the same as the overall supply.

“Tether has definitely lost market share in terms of the supply of USD allocated to different stablecoins,” Nic Carter, creator of the blockchain data site Coinmetrics, told CoinDesk. TUSD and USDC, he added, have been “the major beneficiaries.”

Indeed, according to Coinmetrics data analyzed by CoinDesk, tether’s market capitalization as a share of the broader stablecoin market has steadily declined, with most of that decline coming from a reduction in tether supply (a token’s market capitalization is equal to its price multiplied by its total supply).

market capitalization tether stablecoins
Charts by Nolan Bauerle and Peter Ryan of CoinDesk Research. Data for all charts sourced from Coinmetrics.io. Note that vertical axis scales differ between charts.

“Prior to the run,” Carter said, referring to a period in mid-October when tether’s exchange rate dipped below $0.93 according to CoinMarketCap, “tether consisted of about 94 percent of the total supply in stablecoins; that collapsed to 83 percent after the run.”

But it’s important not to overstate the competitive implications of that collapse. The primary reason for this shift is that Bitfinex – a cryptocurrency exchange that shares executives and owners with Tether – has sent 780 million USDT to a company-controlled wallet known as the Tether Treasury since Oct. 14.

This process, which the company (controversially) refers to as “redemption,” removes tokens from the supply and therefore reduces the market capitalization, which has fallen to around $1.9 billion from a peak of nearly $2.8 billion in September.

Hence, reductions in tether’s supply haven’t benefited rival stablecoins as much as might be assumed, Carter noted. “It looks like some USDT that were redeemed did not, in fact, flow into other competitors, but simply exited to BTC or fiat.”

Volume

Another way to gauge stablecoin market share is to look at what’s happening at cryptocurrency exchanges.

Unsurprisingly, during and shortly after the “run,” a number of exchanges – including OKEx and Huobi – rushed to list alternatives to tether.

Yet Coinmetrics’ data shows only a slight increase in trading volume for tether alternatives over the course of October, and from a tiny base (note that the vertical axis ranges from 96 percent to 100 percent, and tether remains clearly dominant by this metric):

stablecoin exchange volume
Coinmetrics exchange volume data is sourced from CoinMarketCap.

“Exchange volume is small for alternatives because traders aren’t really accustomed to them yet,” said Carter, adding “tether still is considered a useful (albeit risky) coin for traders to get fiat-denominated risk. It just has the accumulated financial infrastructure.”

But there’s one more metric to consider: the volume of transactions on the blockchains for these stablecoins.

By this yard stick, tether alternatives have made more headway. Compared to modest on-exchange volumes, total on-chain transaction volumes were considerably higher for non-tether stablecoins throughout the month, and they appear to have increased after tether broke the buck:

onchain transaction volume tether stablecoins

All told, tether is still dominant, but competition from its many rivals is heating up.

According to Carter, however, “it’s still too early to say which competitor is best positioned to win long term.”


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Author: David Floyd
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Tether Has Yanked $610 Million out of Circulation this Month

Tether Limited, issuer of the dollar-pegged cryptocurrency tether (USDT), has yanked nearly a quarter of the controversial stablecoin’s market cap out of circulation since the beginning of October.

On Wednesday, cryptocurrency exchange Bitfinex sent another 50 million USDT to the Tether Treasury, marking the sixth time this month that the company — which shares a management team with Tether — pulled USDT out of circulation by depositing them into the treasury address. Tether has not issued any new tokens in October, and the last time that new tokens entered circulation was on Sept. 21, when the treasury sent 50 million USDT to Bitfinex.

Source: Omni Explorer

With that transaction on Sept. 21, tether’s circulating market cap rose above $2.8 billion, reaching a new all-time high. In the month that followed, USDT’s circulating supply has plunged by 610 million units, reducing the number of outstanding tether tokens by a full 22 percent to just over 2.2 billion.

Tether’s market cap, however, currently stands somewhat lower, at $2.16 billion, owing to the fact that the token has consistently traded below its supposed $1.00 price point since Oct. 15.

Notably, the bulk of the outflows occurred either after or directly before USDT lost its USD peg, sending the token’s global average price as low as $0.92. Transactions on Oct. 3 and Oct. 9 removed a collectively $110 million from circulation, but the other $500 million was yanked from the market over a period of just three days, from Oct. 14 to Oct. 17, representing a 72-hour supply decrease of 19 percent.

As CCN reported, there are a variety of potential explanations for this rapid increase in outflows. One is that large-scale USDT holders are beginning to swap their tokens out for the recently-launched “regulated” stablecoins from Paxos, Gemini, and Circle, either directly — on exchanges — or by redeeming them while concurrently depositing funds with the alternative token issuers. This would have been particularly attractive over the past several days, as all of these stablecoins have traded at a premium to both USDT and the physical greenback itself. However, while these tokens have experienced rapid market cap growth, their present valuations could only account for a portion of tether’s outflows.

Consequently, it’s likely is that cryptocurrency traders who are confident in their ability to complete fiat withdrawals from Bitfinex — which treats tether as USD but has also experienced high-profile banking woes — are taking advantage of the tether token’s discounted value to engage in arbitrage.

As of the time of writing, the tether price stood at $0.98, according to CoinMarketCap, though on individual exchanges such as Kraken the token continued to trade as low as $0.96 against physical USD.


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Author: Josiah Wilmoth 
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Why Crypto Traders Are So Worried About Tether: QuickTake Q&A

It’s one of the most hotly debated questions in the world of virtual currencies: Is Tether telling the truth when it says that each of its digital coins is backed by one U.S. dollar? The answer could have big ramifications, given that Tether’s coin (also called Tether or USDT) is among the most actively traded cryptocurrencies — treated by many as a substitute for the greenback on crypto markets around the world.

Over the past few days, USDT has broken out of its historically tight trading range around $1.00, fueling fresh speculation that investors may be losing faith in the coin. On Oct. 14, USDT traded at about $0.97 on San Francisco-based crypto exchange Kraken.

1. What is Tether?

It’s an issuer of a cryptocurrency with a twist. Unlike Bitcoin, whose value fluctuates wildly from day to day, Tether’s tokens are designed for stability. Prices for the coins have historically stayed near $1 because Tether says each one is backed by a dollar in its bank accounts.

2. Why are the coins popular?

Many traders use them as a substitute for dollars. Tether’s coins are more easily transferable between cryptocurrency exchanges and other online platforms because they don’t have to travel through the banking system. Stable prices have made the coins handy instruments for betting on the direction of other cryptocurrencies.

3. Why are there skeptics?

While Tether has repeatedly said that its coins are fully backed by dollars, the company has yet to provide conclusive evidence of its holdings to the public. There are also questions about Tether’s relationship with Bitfinex, one of the world’s biggest cryptocurrency exchanges. Some market watchers have alleged that trading in Tether’s coins on Bitfinex, which has the same CEO as Tether, has helped prop up Bitcoin’s price.

In a Medium post on Oct. 8, Bitfinex dismissed allegations that it was insolvent and said that withdrawals were functioning as normal. It added that “Complications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations. However, we continue to do our utmost to minimise any waiting times associated with fiat deposits and withdrawals.”

4. What are U.S. regulators doing?

The U.S. Commodity Futures Trading Commission sent subpoenas to Bitfinex and Tether in December, Bloomberg reported, citing a person familiar with the matter. “We routinely receive legal process from law enforcement agents and regulators conducting investigations,” Bitfinex and Tether said in an emailed statement in January. “It is our policy not to comment on any such requests.”

5. Why is Tether so important for cryptocurrency investors?

Despite their modest total market value of about $2.7 billion, Tether’s coins play an outsized role on cryptocurrency exchanges. They were the second-most traded among all digital currencies after Bitcoin as of Oct. 14, according to data compiled by CoinMarketCap.com. While there are many other so-called stablecoins, none have come close to challenging USDT’s popularity.

6. What’s next?

If authorities were to find any evidence of wrongdoing at Tether or if traders lose faith in the company’s ability to redeem its coins for $1, USDT could quickly lose value. But only time will tell if the coin’s recent slide is just a blip or the start of something bigger. “Tether’s stablecoin dominance will only persist if they can settle community criticisms about their lack of transparency once and for all,” said Jehan Chu, managing partner at blockchain investment and advisory company Kenetic Capital.


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Author: Andrea Tan, Benjamin Robertson and Matthew Leising
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Tether Implodes in 4% Drop = An Important Step Toward Crypto Market Growth

The price of Tether (USDT), a crypto stablecoin backed by the US dollar pegged to $1, has fallen by around 4 percent in the past 24 hours to $0.96.

As USDT fell, it became more expensive for traders to purchase major cryptocurrencies like Bitcoin and Ethereum with USDT, pushing the premium of cryptocurrencies up on crypto-only exchanges like OKEx and Huobi.

At its peak, the price of Bitcoin achieved $7,500 on Bitfinex, as CCN reported on Monday.

Why Tether Sell-Off Could be Better For Crypto

Ostensibly, In the short-term, the sell-off and instability of USDT may seem beneficial for the crypto market due to the increase in the price of most cryptocurrencies but in reality, it really is not.

Bitcoin achieved $7,500 on Bitfinex but the inflated price of BTC by USDT is of less significance to the global cryptocurrency exchange market. It can be argued that the decline of USDT portrayed lack of maturity and strong infrastructure in the market, which could push away institutional investors such as pensions and academic funds that are interested to commit to the asset class.

In the long-term however, the decline of Tether could positively affect the crypto market as it will lead traders to regulated, audited, and transparent alternatives like Gemini Dollar (GUSD), Paxos (PAX), and TrueUSD (TUSD).

Already, the price of TUSD has increased to $1.08, by more than 8 percent, and has risen quite substantially against USDT on Binance, which suggests that traders have started to favor newly emerging stablecoins that have the backing of banks and authorities.

“Bitcoinland: where a simple filthy statist buck is ‘worth’ $1.08 on an exchange… because reasons. Ff you are wondering what this means: there are two ‘synthetic dollars’ being traded against one another here: TrueUSD and Tether the fact that they aren’t trading at $1.00 is because someone (Bitfinex, owner of Tether Ltd) is having bank account / liquidity problems,” Post Oak Labs founder Tim Swanson said.

Since 2014, Tether has provided cryptocurrency-only exchanges an alternative to the US dollar with which traders can hedge their positions to the stability of the US dollar. Prior to 2018, there were no alternatives to USDT, forcing the industry to depend on USDT as a widely accepted stablecoin.

But, as cryptocurrency analyst and trader Alex Kruger told CCN in an exclusive interview, Tether’s lack of transparency and opaque operations poses serious issues for traders. For instance, at this point, it remains unclear whether traders can redeem USDT at a 1:1 ratio to the US dollar, due to the collapse of Noble Bank, Tether’s partner bank.

“Both Gemini and Circle are US based regulated issuers and thus perceived as more trustworthy, carrying lower credit risk. One should expect a great percentage of all USDT (Tether) holdings to migrate to GUSD (Gemini) and USDC (Circle),” Krüger said.

What’s Next?

Bitfinex has clarified that it has obtained the approval of its bank to enable fiat deposits and withdrawals in the next 24 hours. It is possible that the statement of Bitfinex could lead to the stabilization of USDT.


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Author: Joseph Young
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$500 Million In Tether (USDT) Has Made No Impact On Bitcoin (BTC) Price

Injection of Over Half a Billion Dollars worth of USDT Has Made Little Impact on the Crypto Markets

Bitcoin (BTC), Tether (USDT)–Despite Tether (USDT) printing over half a billion dollars worth of new coinage throughout the month of August, [a]financial news outlet reported the move has had little to no impact upon the crypto markets.

LIONBIT

USDT No Longer Impacting Bitcoin Price

While the company behind the most popular stablecoin cryptocurrency, now ranked 8th in total market capitalization with $2.84 billion in circulation, has been the target of numerous investigations, particularly those pertaining to the assets backing the coin, August’s massive influx of new tethers is apparently not swaying the crypto markets. Despite adding an additional $500 million worth to the total market capitalization, a move that has in the past brought accusations of Tether and its partners artificially propping up the price of the industry, Bloomberg reports that the link between new USDT hitting exchanges and an increasing Bitcoin price has eroded over the past year. Whether because of the prolonged bear cycle of 2018, which is already drawing attention for its investor fatigue, or a new market force at work, Tether no longer has the same impact as in the past.

Several economists and market analysts, most recently a group out of the University of Texas, have been observing Tether, it’s regular injecting of USDT into the market and the impact that has upon crypto prices to conclude that some form of manipulation or price stabilization is occuring. With the massive influx of freshly minted Tethers throughout the month of August, Bloomberg feels confident concluding that the input of the high-profile stablecoin is no longer swaying prices. Bloomberg also refutes another paper by the research group Chainalysis, which made the claim that USDT is influencing prices of altcoins and smaller capitalization cryptocurrencies, even if the stablecoin fails to move the price of BTC as it did with some regularity throughout 2017. Citing as an example, Bloomberg looks at August’s push of half a billion dollars worth of USDT into the crypto markets, without a corresponding price increase–or stabilization–for Bitcoin, in addition to other popular currencies such as EOS and NEO. Instead, altcoins have been largely in decline, with the price of Bitcoin fluctuating throughout the $6000 – $7000 range since the beginning of the month.

TIP

Whereas past injections of Tether, particularly to the tune of half a billion dollars (or roughly 17 percent of the total Tether now in circulation) would have corresponded to a significant price movement for Bitcoin, and the crypto markets in general. Instead, August 2018 has seen one of the steepest declines across the board for BTC and altcoins, with most currencies experiences double-digit losses in an already prolonged bear market. This has led some to the conclusion that either Tether is not directly manipulating the market with its timing and method for USDT injection–or at the very least not attempting to do so–or that the same forces that coupled Bitcoin rallies so closely with Tether injections have evaporated from the market.

Some have found stablecoins to be an interesting caveat to the high volatility, high risk of cryptocurrency investing. Compared to BTC and other altcoins, USDT and its brand of stablecoins provide the benefits of cryptocurrency while pegging the valuation to a fixed amount–in this case the U.S. dollar. Some find that the currencies exhibit too much centralization, and lack the departure from government fiat that has been so enticingly portrayed in the majority of cryptocurrencies. However, with the slumping crypto markets throughout 2018, Tether has become a safe harbor for investor funds, particularly those left on exchanges to ride out the price volatility of the market.


IZX

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IBM Is Experimenting With a Cryptocurrency, Which It Says Is More Stable

It’s basically a blockchain-backed dollar — but you can’t convert your money to it (yet).

Cryptocurrencies fluctuate wildly in value. If you’ve been following bitcoin since last fall, you’ve seen the value of one unit of bitcoin surge from less than $5,000 in early October 2017, peak at more than $19,000 in December and gradually make its way back down to the $6,000 range.



For transactions that do involve money, companies are seeking more stable cryptocurrencies, with all of the blockchain tracking benefits of crypto, minus the volatility and lost value and time in the conversion process. IBM is one company working to prove out what’s called a “stablecoin” solution, which means its value is based on the value of the U.S. dollar at any given time.

The 107-year-old legacy tech corporation has embraced blockchain, which underlies cryptocurrencies, in recent years — using it for applications including a cross-border payments network, tracking luxury goods such as diamonds and more.

For crypto exchanges up to this point, IBM has relied on a currency called Stellar Lumens. But this week, the company announced it will begin testing Stronghold USD “to experiment with ways for financial institutions and other organizations to achieve faster, safer and more efficient transaction processing and money transfer throughout the world’s economy,” according to a press release.

For now, Stronghold USD is only available as a business-to-business cryptocurrency. Consumers can’t buy anything with it. But IBM’s adoption speaks to the trend and promise of cryptocurrencies with values based on and equal to the dollar.

Tether is one stablecoin that’s been widely adopted, though its true value is a matter of controversy. It’s “often the second most traded crypto asset after bitcoin,”. “Traders routinely trade in and out of it as they attempt to outmaneuver bitcoin’s price swings.”

Entrepreneur contributor Han-Gwon Lung wrote about the potential for stablecoins — and one in particular, Basis — in late May: “Figuring out how to create the world’s first true stablecoin (as did the guys at Basis, who raised $133 million from VCs like Andreessen Horowitz) would revolutionize finance as we know it.”

One small company that is dabbling in stablecoin is The White Company, a fine art and luxury goods dealer that allows purchases via cryptocurrency, from Super Bowl suite tickets to Lamborghinis. CEO Elizabeth White launched the White Standard, a stablecoin, in early June, so clients could convert their money to and from cryptocurrency more directly.


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Author: Lydia Belanger
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Tether Code ‘Flaw’ Was Actually an Exchange Error

Suggestions that the code for Tether’s dollar-pegged cryptocurrency USDT may contain an error that can be exploited to allow double spending appear to be false.

According to the latest statements from both blockchain security firm Slow Mist, the company that made the original claim, and Tether, the startup that provides software for USDT, the issue is actually down to an exchange integration flaw.



On Thursday, Slow Mist seemed to claim in a WeChat post that when an exchange is conducting a transaction with USDT, the exchange needs to verify that the transactions details are “true,” otherwise a double spend can occur. The company further suggested that the problem had been used in an attack on an unnamed crypto exchange, and, in a post on Twitter, included a page of transaction data with some of the details blurred out.

The claims, if true, were potentially impactful, as the USDT token is notably used to substitute for the U.S. dollar, acting as a proxy to quickly shift funds around exchanges rather than wait for wire transfers from banks.

However, in a statement, a spokesperson for Tether emphasized that the issue was not part of the USDT protocol.

They told CoinDesk:

“Rather, it was due to a faulty integration of Tether at the exchange level. While we can’t exercise much control over how exchanges execute the integration process, we’ve provided integration guides in this instance to help solve the issue and will continue to assist any other exchanges in their USDT integration processes.”

Now, Slow Mist has also clarified that the issue does, in fact, lie with how exchanges integrate the USDT protocol for transactions, and not with the protocol itself.

In a statement to CoinDesk, the company said, “There was no Tether vulnerability [itself], but rather poor handling of incoming transactions. We have updated Twitter to explain this issue. We are sorry to say that the previous description did not express clearly.”


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While apparently not a Tether issue, the developments may add to the industry nervousness around the firm, which has been the subject of controversy alongside Bitfinex, the cryptocurrency exchange to which it is closely linked. Critics have alleged that Tether’s USDT token is, in spite of its claims, not fully backed by a supply of U.S. dollars and has instead been used to manipulate the cryptocurrency market.

Just last week, Tether released a report attesting to its U.S. dollar reserves as proof that the token is fully backed. As CoinDesk highlighted, though, the report falls short of serving as a fall audit of Tether’s finances and comes months after the company’s relationship with auditing firm Friedman came to an end.

After Slow Mist’s original post caused widespread concerns over security, several exchanges including OKEx and ZB.com verified that they were unaffected by the issue.

LBank announced it “conducted an emergency technical investigation,” finding that it was not vulnerable. However, the exchange stated that “we cannot guarantee the security of the other trading platforms and USDT as a whole, so we decided to close the USDT recharge temporarily.”

Editor’s note: Some statements in this article have been translated from Chinese.


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Author: Nikhilesh De
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Bitcoin Price Eyes Comeback as 250 Million New Tethers Enter Circulation

Cryptocurrency start up Tether issued $250 million in new tokens on Monday, sparking speculation that a bitcoin price rally could be inbound



Blockchain data indicates that Tether, the creator of cryptocurrency “stablecoin” USDT (colloquially called tether), issued 250 million new tokens this morning, June 25.

USDT, which is pegged to USD at a 1-to-1 ratio, serves as a proxy for physical dollars on many cryptocurrency exchanges, owing to the fact that many trading platforms have difficulty obtaining the banking relationships necessary to hold fiat currency on behalf of customers. Over the past 24 hours, tether’s $4.2 billion in trading volume was second-highest among all cryptocurrencies, ranking behind only bitcoin.

That Tether is issuing new tokens is an indication that new capital is flowing into the cryptocurrency markets, since — at least according to the company — tokens are created when individuals or organizations deposit physical dollars into Tether’s reserve bank accounts.

Consequently, the release of these tokens could be a bullish indicator for the bitcoin price (and by extension the wider cryptocurrency market), considering, of course, that the owner could hold them for an indefinite period of time before trading them.

Monday’s creation of 250 million new tokens marked the first significant tether issuance since May 18, when Tether issued $250 million in USDT. The bitcoin price rose in the days following this event, from $8,100 on May 18 to $8,500 on May 21. However, that rally proved to be short-lived, and the bitcoin price shed more than $2,300 in the weeks that have followed.

Questions have long swirled about Tether’s solvency, particularly since the firm has never released an independent audit of its balance sheet.

However, last week, legal firm Freeh, Sporkin & Sullivan LLP (FSS) released a report indicating that USDT was fully-backed by physical dollars stored in Tether bank accounts, as of June 1. While not a full audit, the report was an important step toward rebutting allegations that the company has operated a fractional reserve, using unbacked tokens to manipulate the bitcoin price at key points during market swings.

The token currently has a circulating market cap of more than $2.6 billion, making it the 11th-largest cryptocurrency. According to Tether’s “Transparency” page, the firm is holding more than $3 billion in its reserve bank accounts, indicating that it could issue approximately $400 million in new tokens without exceeding its assets.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Josiah Wilmoth
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