There hasn’t been any USDT tokens releases in a while, so the crypto-market starts asking questions. Among that, there has been a controversy surrounding the Tether Limited Company and the Bitfinex exchange, and a subpoena is also involved. But what on earth is happening?
The Bloomberg revelation: Tether Limited has been subpoenaed
Everything started in December, where an anonymous source revealed through Bloomberg that the Tether Limited Company received a subpoena by the U.S. Commodity Futures Trading Commission. The reason was the consecutive and suspicious issuances of USDT units occurring during in 2017. Actually, there are 2.2 billion USD of Tether in circulation, and it wasn’t made clear if that Tether Limited had or hadn’t the sufficient funds to back it. It would have been problematic if there are more units of USDT on the market than Tether Limited has money.
Anyways, Tether Limited brought proof that they indeed have the required money to release that much tokens, although the mentioned proof was said to be shady and kind of unclear. The subpoena, instead of ending rumors about the company, helped starting new ones. It appeared that something was odd with the tokens issuances; they did not follow any periodic pattern, and they seemed to be decided randomly by Tether Limited. But someone finally found the possible reason behind these issuances.
The connection between Tether Limited and Bitfinex
The thereport.com website said that most of USDT tokens releases in 2017 followed a drop of the Bitcoin value, which resulted on a reverse of the downtrend. The same website attribute 48.8% of Bitcoin’s price rise to Tether Limited’s actions. Indeed, Newsbtc.com made it obvious that 20 million of USDT units were released right after a drop of the Bitcoin value in November. As for the link with the Bitfinex exchange, we must mention that these two companies have the same CEO.
Also, Bitfinex was subpoenaed at the same time as Tether Limited in December, mainly for the same reasons as the cryptocurrency company. While Bitcoins and Tethers are actively exchanged on Bitfinex, it wasn’t long before the exchange was suspected to play a big role in sudden rises of Bitcoin price after massive amount of USDT tokens are released on the market.
What to expect for Tether (and Bitcoin)
If these allegations appears to be true, chances are there won’t be any USDT tokens releases following every drop in Bitcoin price. Some experts a market correction that might go from 30% to 80% of actual Bitcoin value. Actually, the Bitcoin is facing several issues, and for example, it becomes harder and harder to buy cryptocurrencies using credit cards.
If Tether Limited Company doesn’t take actions to boost Bitcoin’s price, at least it would be at its real value. As for Tether, it would be terrible for the cryptocurrency if the company actually don’t have the sufficient funds to back it. Some expects says an audit might be done soon in order to verify if Tether Limited actually have the $433 billion they claim to have on their website.