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Tether Shows Law Firm Its Funds But Stops Short of an Audit

June 21, 2018 |

Tether Shows Law Firm Its Funds But Stops Short of an Audit

Tether has released a surprise “Transparency Update” that purports to show it has enough funds in the bank to cover the $ 2.6 billion of USDT in circulation. The company has stopped short of a full audit, however, leaving critics bemoaning  Tether’s inability to settle the solvency debate once and for all.

Also read: Major Korean Crypto Exchange: $ 31 Million Vanishes

Tether Tries to Dispel the FUD

Tether Shows Law Firm Its Funds But Stops Short of an AuditSpeculating over the solvency of Tether, and specifically whether its dollar-pegged stablecoin is actually backed by fiat reserves, is a pastime that has spawned entire Twitter personas devoted to the issue. Vocal Tether critic Bitfinexed has been joined by a growing chorus of critics demanding full transparency from Tether, which is part owned by Bitfinex. Tether has now obliged, producing, for the second time in six months, a legal report into its financial standing.

The report, which was produced by the law firm of a former FBI director, carries weight from a legal perspective. But it fails to provide cast iron guarantees that Tether is not operating a fractional reserve. Until the company’s accounts are professionally audited, the true state of Tether’s finances will remain a point of speculation.

“As many are aware, Tether and related parties have been the subject of scrutiny over the course of the past several months,” begins the Transparency Update. “We have spent our time largely disregarding these allegations, instead letting our efforts, and the continued faith of our community of users, speak for themselves.” Many cryptocurrency traders would rather Tether had addressed these issues sooner rather than letting the blind “faith” of its community serve as a guarantee.

Enter Freeh, Sporkin & Sullivan

Tether Shows Law Firm Its Funds But Stops Short of an AuditThe magnificently named Freeh, Sporkin & Sullivan are the legal firm who were handed the task of taking a snapshot of Tether’s bank balance. This they did on June 1, whereupon they confirmed that there were sufficient funds to cover all USDT in circulation on a 1:1 basis.

“Recent reports have opened our eyes to the fundamental lack of understanding surrounding Tether, the issuance and redemption mechanisms, and the compliance procedures that we have built,” continues the Transparency Update document. “To mitigate this, we will be taking additional steps aimed at opening up Tether to the general public and clearing away any uncertainty that may exist.”

The simple answer, and the one that cryptocurrency holders have been screaming out for, is for Tether to commission an independent audit. Only once that has been completed can the lingering doubt disperse and faith in Tether be restored. While today’s report is hardly the all-clear that the crypto community might have hoped for, its release still helped propel BTC up by $ 150, undoing the damage inflicted hours previously by the news of Bithumb’s $ 31 million hack.

Do you think Tether has the funds to cover all of the USDT in circulation? Let us know in the comments section below.


Images courtesy of Shutterstock, and Tether.


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The post Tether Shows Law Firm Its Funds But Stops Short of an Audit appeared first on Bitcoin News.

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Bitcoin’s price has been manipulated with another cryptocurrency: tether, professor says

June 13, 2018 |

Tether, one of the most-traded cryptocurrencies, shows a pattern of being spent on bitcoin at pivotal moments, helping to drive the world’s first digital asset to a record price in December, according to research by a University of Texas professor known for flagging suspicious activity in the VIX…


L.A. Times – Business

Meet the Stablecoins Taking on Tether

April 13, 2018 |

Meet the Stablecoins Trying to Take on Tether

Stablecoins aren’t exciting. They don’t pump, moon, or 10x. And yet they have the potential to make traders more money than any other cryptocurrency. These stabilized tokens – usually pegged to the US dollar – scarcely move in price, and yet they’re pivotal in anchoring the crypto markets. Here’s everything you should know about the new class of stablecoins.

Also read: Bitmex Research: We Doubt Ethereum’s Ability to Reduce Reliance on PoW

The Price of Stability

Bitmex Research: New Data Supports Noble Being Tether’s Primary Reserve BankTether, the best known stablecoin, is 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. When the markets are down, some will remain in the safety of tether for weeks, venturing back into “proper” crypto only when there are signs of recovery.

Tether is a highly controversial stablecoin, not because of how it works, but due to questions over whether it’s actually dollar-backed with fiat reserves, but that’s a debate for another time. What’s undisputed is that over-reliance on a centralized coin that accounts for $ 4 billion of daily trade volume is a bad thing. Competition for tether is to be encouraged, and was welcomed by Ethfinex no less – whose parent exchange Bitfinex effectively owns Tether.

Last week, Ethfinex introduced dai, a decentralized tether alternative. Here’s how it, and the rest of the current crop of stablecoins, work:

A Brief Guide to Stablecoins

Meet the Stablecoins Trying to Take on Tether
Dai by MakerDAO

Dai: A decentralized dollar-pegged stable coin from Maker DAO that operates as an ethereum token. The buyer places ethereum in the Maker core smart contract and receives a dollar equivalent of dai in return. It’s tradable on the likes of Bibox, Ethfinex, IDEX, and Bancor Network. It will also soon be available on Omisego’s DEX.

TrueUSD: A collateralized stablecoin backed by USD held in escrow accounts. It’s basically a more transparent tether and is available on Upbit and Bittrex – where it’s even tradable against tether.

Stably: Another USD reserve-backed stablecoin that will work on multiple blockchains when it launches including ethereum and stellar. Stably just raised $ 500,000 in a seed round.

Bitshares: Usable on the Bitshares exchange only, Bit USD is another dollar-pegged coin, implemented using “smartcoins” to collateralize the currency held against it, typically Bitshares.

Havven: A payment network which also has its own stablecoin. e USD is the first of these, which can be exchanged for ether, though nomins (n USD), the official Havven stablecoin, will launch soon to replace e USD.

New Stablecoins Are Incoming

Several other stablecoins are on their way including kowala, basecoin, augmint, and carbon. Each of these coins has their own means of achieving – or at least attempting – stability. Kowala’s k USD for example is an “anonymously stabilized cryptocurrency” whatever that means, and carbon uses “algorithmically adjusted coin supply based on demand” to ensure it closely matches the USD. VC firm General Catalyst has just led a $ 2 million round to invest in carbon and basecoin raised $ 125 million via a SAFT. Stablecoins are big business.

Meet the Stablecoins Trying to Take on Tether

Not everyone is impressed with stablecoins, and specifically their ability to maintain relative stability. Perennial bitcoin bear Preston Byrne has made it his duty to rail against them, and recently highlighted nubits, a lesser known stablecoin, whose value has been anything but stable.

Meet the Stablecoins Trying to Take on Tether
Nubits: the not-so-stablecoin

Creating a coin that can stubbornly cling to the US dollar through thick and thin is a lot harder than it sounds; even tether’s prone to wobbling. But for as long as demand for a hedge against crypto volatility persists, stablecoins will perform an essential job. And with so many new entrants poised to launch, the battle for stablecoin supremacy has only just begun.

Do you think other stablecoins can overtake tether, and if so which? Let us know in the comments section below.


Images courtesy of Shutterstock, and Coinmarketcap.


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The post Meet the Stablecoins Taking on Tether appeared first on Bitcoin News.

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Bitfinex Introduces Trading for 12 Altcoins Including Tether Competitor

April 9, 2018 |

Bitfinex Introduces Trading for 12 Altcoins Including Tether Competitor

Bitfinex has announced the introduction of 12 new ERC-20 tokens. Among the tokens listed is Dai – a stablecoin competitor to Tether.

Also Read: First Soros, Now Rockefellers Move into Cryptocurrency

Bitfinex Announces Trading Pairs for 12 New Altcoins

Bitfinex Introduces Trading for 12 Altcoins Including Tether CompetitorOn April 7th, Bitfinex announced via Medium the introduction of 12 new altcoins on its trading platform. All of the new tokens are ERC-20 tokens (the technical standard for smart contracts hosted on the Ethereum blockchain).

The newly supported altcoins are Aion (AION), Iostoken (IOST), Request Network (REQ), Raiden Network (RDN), Loopring (LRC) Bnktothefuture Token (BFT), Cofound.it (CFI), Wax (WAX), Singularitynet (AGI), Medicalchain (MTN), Odem (ODEM), and Dai (DAI).

BTC, ETH, and USD trading pairs for the newly supported altcoins went live at 4PM UTC on April 7th. Bitfinex’s announcement stated that “The newly introduced token listings have a combined market capitalization of $ 1.1B+ USD.” Margin trading and lending markets for the new tokens “will be enabled gradually, as sufficient liquidity develops.”

Notable Listings Include Dai and Bnktothefuture

Bitfinex Introduces Trading for 12 Altcoins Including Tether CompetitorThe newly listed ERC-20 tokens include Dai, “a digital, decentralized stablecoin built on Ethereum.” The listing of Dai is significant, as the project appears to be in direct competition with major stablecoin, Tether – which shares the same directors as Bitfinex. The exchange stated that “Dai will initially be made available against BTC, ETH, and USD whilst we explore the possibility adding additional DAI pairs.”

The listing of Bnktothefuture Token is also notable, as Bnktothefuture appears to own shares in Bitfinex. Bnktothefuture was also involved in the controversial conversion of BFX tokens into equity in Bitfinex following the devastating hack suffered by the exchange in 2016. On August 22nd, 2016, Bitifinex “formally signed a letter of intent with Bnktothefuture […] to provide solutions towards compensating customers with equity in Bitfinex.”

The Chief Executive Officer of Bitfinex, Jean-Louis van der Velde, stated “The introduction of such a large selection of tokens, representing a diverse array of blockchain-based projects, marks an exciting development for Bitfinex. We are proud to introduce these as we believe that each token serves to strengthen and enliven a unique aspect of the global blockchain ecosystem, and will offer new and exciting trading options for our users.”

Mr. Velde added “We are excited to be going the extra distance to accommodate the needs and expectations of our traders. Looking forward, we will continue to expand our service offerings to best address their needs, and to maintain an advanced and supportive trading platform for the growing digital asset community.”

Do you think that Bitfinex’s decision to list Dai is significant? What do you think the listing of Dai on Bitfinex may indicate for Tether’s future? Share your thoughts in the comments in the section below!


Images courtesy of Shutterstock


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The post Bitfinex Introduces Trading for 12 Altcoins Including Tether Competitor appeared first on Bitcoin News.

Bitcoin News

Cobinhood Delists Six Tokens Susceptible to Pump and Dump, Limits Tether Pairs

March 29, 2018 |

Cobinhood Delists Six Tokens Susceptible to Pump and Dump, Limits Tether Pairs

As some cryptocurrency exchanges are adding new altcoins, tokens and forks all the time, cashing in on massive listing fees from promoters, the need arises to trim the fat ever so often. Now Cobinhood is removing a few, offering a glimpse on how trading venues decide which tokens to cull. 

Also Read: Canadian Multinational Bank BMO Blocks Cryptocurrency Transactions

Changes to Token Listings

Cobinhood Delists Six Tokens Susceptible to Pump and Dump, Limits Tether PairsTaiwan-based cryptocurrency service platform Cobinhood has recently announced a number of changes to its roster of available trading instruments. The following tokens will no longer be supported on the exchange: Funfair (FUN), Gnosis (GNO), ICONOMI (ICN), Santiment (SAN), Substratum (SUB) and Voise (VOISE). Depositing, trading, and all open orders will be cancelled automatically on April 13, 2018.

The exchange team explains that, “After careful consideration, we factored these criteria, while not exhaustive, as determinants of discontinuation. Limited trading volume on the exchange, which could potentially lead to trading malpractice (e.g. pump and dump). Poor community reception. Unestablished cooperation with the token team.”

In contrast, Cobinhood announced the addition of bitcoin cash (BCH) support starting March 30, including the abilities to deposit, withdraw, and trade BCH-BTC, BCH-ETH, and BCH-USDT pairs. The exchange is also launching corporate accounts meant for companies and organization rather than individuals, with no deposit limits.

Limiting Tether Pairs

Cobinhood Delists Six Tokens Susceptible to Pump and Dump, Limits Tether PairsCobinhood also decided that Tether (USDT) as a quote currency will only be made available for sixteen base currencies (BRD, BDG, BOT, BTC, COB, CMT, CGC, DXT, ENJ, ETH, LALA, LTC, LYM, MCO, Qtum, and UTNP) starting April 20. After the date passes, open USDT orders paired with all other base currencies will be cancelled automatically. It currently offers about fifty USDT pairs.

This move is perhaps a little bit surprising considering that Cobinhood has only switched from USD to USDT based trading pairs in February. However, this controversial dollar-proxy has been facing growing criticism recently, causing some exchanges to want to limit their dependence on it. For example, earlier this month Bittrex added a second stablecoin in the form Trueusd, in a move seen as a hedge against future Tether regulation.

How should exchanges treat low volume altcoins? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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The post Cobinhood Delists Six Tokens Susceptible to Pump and Dump, Limits Tether Pairs appeared first on Bitcoin News.

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Independent Ratings Agency Alerts Investors About Dangers of Tether

February 13, 2018 |

Independent Ratings Agency Alerts Investors About Dangers of Tether

Another outside observer of the controversial tether cryptocurrency is warning about the dangers it presents for the uninterrupted operation of USDT exchanges. Weiss Ratings is seeking to educate investors on the systematic risk tether introduces to the ecosystem.

Also Read: Faced With Criticism IOTA Fans Try to Bully Growing List of Detractors

Inherent Risks of Blind Trust

Independent Ratings Agency Alerts Investors About Dangers of TetherWeiss Ratings, an independent U.S. agency which recently published letter grades for cryptocurrencies, has issued an alert to investors about the dangers of tether (USDT). It highlights common fears about the stablecoin which is claimed to be fully covered by U.S. dollar reserves.

“The big issue: There’s never been an audit, and the folks behind Tether has been quite shady when asked. They have continuously claimed their tokens are backed 100% by actual dollars, yet they have failed to present any evidence to support this claim. On social media, there appears to be consensus that what Tether is actually doing is running a fractional reserve system. In other words, most observers claim they DO NOT have the dollars to back up all those Tether coins. I tend to agree. It’s just too suspicious,” says Weiss analyst .

What Happens When the Feds Stop USDT Printing?

Independent Ratings Agency Alerts Investors About Dangers of TetherWeiss explains how the importance of USDT to the entire ecosystem is that many non-fiat exchanges (like Binance or Okex) use it as a proxy for real dollars in trading. Because of this, it is the third most traded cryptocurrency and the only one with trading volumes that regularly exceed its market cap. These exchanges are thus dependent on tether for liquidity and put investors at risk if any government decides to pull the plug out of its printers. Some consider this to be a likely scenario under U.S. law.

“The consequences of hanky-panky could be far-reaching. What happens if Tether does turn out to be fraudulent? Or what happens if a major government determines that cryptocurrencies like Tether are being used by exchanges to avoid regulations? What if this large source of liquidity suddenly evaporates?” asks. “Conceivably, it could cause exchange failures. It could drive investors to liquidate their positions, causing sharp declines in market prices.”

Should cryptocurrency investors worry about the continued liquidity of USDT exchanges? Tell us what you think in the comments section below.


Images courtesy of Shutterstock.


Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

The post Independent Ratings Agency Alerts Investors About Dangers of Tether appeared first on Bitcoin News.

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Study Finds Little Correlation Between Tether Printing and Bitcoin’s Price

February 6, 2018 |

Study Finds Little Correlation Between Tether Printing and Bitcoin's Price

Over the past few months there’s been a lot of internet chatter concerning the digital currency tether (USDT) and whether or not it’s really backed by U.S. dollars. Further, there’s been skeptics, speculators, anonymous Twitter handles, and well-researched reports that claim tether printing moved the price of BTC considerably this past year. However, just recently a Ph.D. student at the University of Groningen analyzed the situation, and his findings reveal the theory of new tethers pumping the bitcoin price looks improbable.

Also Read: Senate of Nigeria Launches Probe of Bitcoin Trading in the Country

A Statistical Point of View Doesn’t Support the Tether Printing and BTC Pump Theories

Study Finds Little Correlation Between Tether Printing and Bitcoin's PriceTwo days ago, Oleksandr Ivanov, a data scientist from the University of Groningen, revealed a “statistical point of view” that looks into the theory behind tethers pumping the price of bitcoin. Lots of people believe that tether (USDT) printing had caused bitcoin’s significant spike in value, and they think this relationship is correlated to last year’s phenomenal rise. One study called ‘The Tether Report’ says that when USDTs are printed, the price had kicked into higher gear in “two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet.” However, even though some people believe the two digital currencies are ‘tethered,’ Ivanov says the “correlation in all cases is still close to zero.”  

“I approached this question from a statistical point of view — If the alleged Tether strategy is true, we should see a positive correlation between the change of the amount of tethers and the change of bitcoin price at some time frames,” explains Ivanov’s analysis.

Study Finds Little Correlation Between Tether Printing and Bitcoin's Price
Historical data of bitcoin price and the number of tethers in 2017 then the calculated the daily percentage change in bitcoin price.
Study Finds Little Correlation Between Tether Printing and Bitcoin's Price
The daily change of Tether‘s market cap (the number of tethers).

A Negative Correlation Between the Number of Tethers and the Change of Bitcoin Price

Ivanov used the historical data from BTC prices using Coinmarketcap and the number of tethers in 2017. Following this, he calculated the daily percentage change of bitcoin price and the daily change of the number of tethers in existence.

Study Finds Little Correlation Between Tether Printing and Bitcoin's Price

“Next, I plot the bitcoin daily percentage change in price versus the amount of tethers daily percentage change, and most of the points center around zero — Some points on the far right corner of the plot correspond to large percentage changes in the amount of tethers. These are the outliers. Interestingly, they mostly lie below zero in the bitcoin price percentage change axis,” Ivanov’s research details.

Pearson correlation coefficient for bitcoin daily price percentage change and the amount of tethers daily percentage change is -0.17168 (p-value is 0.001, which is statistically significant). So there is a negative correlation between the change of the amount of tethers and the change of bitcoin price.

Study Finds Little Correlation Between Tether Printing and Bitcoin's Price

The researcher then looks into whether or not tethers are used to pump BTC prices over a longer period of time. The “correlation in all cases is still close to zero” says Ivanov, and his testing does not support the claims that BTC prices are moved by USDT printing — although, Ivanov explains, his statistical analysis doesn’t necessarily fully disprove tether manipulations.

“A transparent public audit of Tether will shed light on this issue,” Ivanov concludes.

What do you think about Ivanov’s research? Do you think tethers pumped BTC? Let us know in the comments below.


Images via Pixabay, U.S. Treasury, Tether, Oleksandr Ivanov, and Forklog.


Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

The post Study Finds Little Correlation Between Tether Printing and Bitcoin’s Price appeared first on Bitcoin News.

Bitcoin News

Tether Printed One-Third of All USDT After Receiving Subpoena

February 2, 2018 |

Tether Printed One-Third of All USDT After Receiving Subpoena

Following the recent announcement that Tether received a subpoena from the United States Commodity Futures Trading Commission on the 6th of December, it has become apparent that over one-third of the total supply of Tether was created after the date of the subpoena’s delivery.

Also Read: U.S. Regulators Send Tether and Bitfinex Subpoenas

Supply of USDT Increases Significantly Following December 6th Subpoena

Earlier this week, it was reported that Bitfinex and Tether had been sent subpoenas by the United States Commodity Futures Trading Commission (CFTC) on December 6th, 2017. Although further details pertaining to the subpoenas have not surfaced, the dramatic explosion in the number of USDT in circulation witnessed last year despite Bitfinex and Tether’s loss of banking partners in March has long called into question the integrity and transparency of both companies.

From February 2017, the number of USDT in circulation has grown by nearly 9,000%, rising from approximately $ 25 million USD at the start of February last year to more than $ 2.25 billion at the end of January 2018 according to Coinmarketcap. Since receiving the subpoena, Tether increased the number of USDT by 775 million, comprising a 52.5% increase in the total supply from December 6th, 2017. As such, approximately 34.5% of all USDT created were produced after Tether had received the subpoena from the CFTC.

Suspicions Grow Surrounding Bitfinex and Tether’s Operations

Widespread speculation has attributed the ramping up of USDT issuance to a last ditch attempt by Tether and Bitfinex to manipulate the BTC markets in light of the subpoena. Many sources have argued that much of the Tether created since December 6th may have been produced without USD backing, and then traded on exchanges to drive the price to record highs before the subpoena’s existence could be revealed.

Accusations of insider trading have consistently hounded Bitfinex throughout its lifespan. In early 2013 an apparently disgruntled former Bitfinex employee leaked an email correspondence between himself and the former CEO of Bitfinex, Raphael Nicolle. In the email, the employee alleges that the trading account for Bitfinex’s current Chief Financial Officer, Giancarlo Devasini, “was credited one million dollars, money that he didn’t have deposited in his account.”

The statement issued by Bitfinex and Tether regarding the CFTC subpoena claims “We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests.”

Expanding Mandate of the CFTC

News of the subpoena broke just days after Jay Clayton, the chairman of the United States Securities and Exchange Commission, and J. Christopher Giancarlo, the chairman of the CFTC, co-authored an open letter discussing their outlook on the role of the regulatory institutions with regard to the cryptocurrency markets.

In the letter, it is asserted that following the launch of CBOE and CME’s respective bitcoin futures markets, the CFTC “gained oversight over the U.S. bitcoin futures market and access to data that can facilitate the detection and pursuit of bad actors in underlying spot markets.”

What is your opinion on the controversy surrounding the operations of Bitfinex and Tether? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Pixabay, Wikipedia


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The post Tether Printed One-Third of All USDT After Receiving Subpoena appeared first on Bitcoin News.

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Tether Severs Ties With Its Auditor, Leaving Its Accounts Shrouded in Mystery

January 30, 2018 |

Tether Severs Ties With Its Auditor, Leaving Its Accounts Shrouded In Mystery

Barely a week passes when Tether isn’t in the news. For a so-called stable coin, Tether and its acolyte Bitfinex are at the center of a lot of instability within the cryptoverse. After it emerged over the weekend that Tether had kissed goodbye to its auditor, critics of the opaque company began to wonder whether they would ever be granted a glance at the company’s books. Months of promises have ended with a whimper now that auditor Friedman LLP has exited stage left.

Also read: Vouching Bitfinex and Tether’s Bank Accounts Hold Nearly $ 3 Billion USD

Tether, Friedman, and the Audit That Never Was

The Tether story is like a children’s classic that’s been retold so many times as to obfuscate many seeds of truth. What is beyond dispute is that tethers – tokens with a fixed $ 1 value – are widely used as a means of surrogate fiat currency by millions of crypto traders and several major exchanges. Most people have no problem with this arrangement, nor do they dispute that Tether, and Bitfinex – the exchange whose owners hold a controlling stake in the company – is profitable.

Tether Severs Ties With Its Auditor, Leaving Its Accounts Shrouded In Mystery

With Coinbase recording $ 1 billion of revenue a year, Binance raking in $ 300 million and Coincheck instantly compensating victims of the $ 400 million NEM hack in Japanese yen, exchanges aren’t short of money. It is the secretive way in which Tether operates that has given grounds for concern. Last year, after lingering rumors that the company didn’t possess the USD to cover the USDTs it was merrily issuing, Tether reluctantly agreed to conduct a public audit. Traders waited for the report to be issued, but as delays mounted up, commenters ventured that the audit would never be published. It appears they were right.

Tether Severs Ties With Its Auditor, Leaving Its Accounts Shrouded In Mystery

All Talk, No Action

Friedman LLP has confirmed via a statement that its relationship with Tether has come to an end, but gave few specifics as to the reason behind the parting of ways, preferring to trot out platitudes about remaining “committed to the process”. The biggest fear would be for it to transpire that Tether lacks the USD to cover the USDT tokens it is readily issuing; as many as $ 500 million a week of them have been introduced to the crypto markets this year. But even if it emerged that Tether/Bitfinex had the assets but was issuing tethers without rhyme or reason, it would still be a red flag.

In theory, issuing batches of tethers in accordance with fiat currency deposits into a Tether bank account ought to be a straightforward. Conducting an audit of that process should also be a simple undertaking. The audit was announced back in May 2017 with talk of Friedman LLP conducting “a comprehensive balance sheet audit”.

“Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame,” proffered Friedman on Saturday. The complexity of this task is widely disputed, not least by Tether’s most vocal critic.

Tether Severs Ties With Its Auditor, Leaving Its Accounts Shrouded In Mystery

Weighing Up the Need for a Balance Sheet

Most people aren’t as single-minded as prominent Tether critic Bitfinexed; they just want to know that everything’s in order and then they can go back to trading crypto with confidence that the rug’s not about to be swept from under their feet. It’s hard to tell what a Tether collapse or cessation of service would do to the markets, but it wouldn’t be pretty and the slump could last months. In the vacuum created by Tether’s awkward silence, stablecoin alternative Trusttoken has been touting itself as the natural successor.

Tether Severs Ties With Its Auditor, Leaving Its Accounts Shrouded In Mystery

Some crypto-economists believe that the very concept of a stablecoin is unworkable and is destined to failure, whether due to government regulation or inability to maintain a stable price. Tether, for example, wobbles by around 2%, with buy orders for the token exceeding $ 1 during major bitcoin slumps, and dipping below $ 1 this weekend as the Friedman news broke. Whether Tether competitors can overcome these objectives remains to be seen. Given the uncertainty the Tether imbroglio has sown, any successive stablecoin will need to take great pains to ensure that its books are audited and transparency comes as standard.

Do you think Tether’s failure to provide an audit is cause for concern? Let us know in the comments section below.


Images courtesy of Shutterstock, and Coincodex.


Need to know the price of bitcoin? Check this chart.

The post Tether Severs Ties With Its Auditor, Leaving Its Accounts Shrouded in Mystery appeared first on Bitcoin News.

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Cobinhood to Adopt Controversial Stablecoin Tether After Termination of Banking Services

January 27, 2018 |

Cobinhood to Adopt Controversial Stablecoin Tether Amid Cessation of Banking Services

Recently launched cryptocurrency service platform, Cobinhood, has announced that it has suffered a termination of services from its banking partners. In order to continue operating, the exchange announced on its homepage that it will replace USD trading pairs with USDT pairs during the coming week.

Also Read: Vouching Bitfinex and Tether’s Bank Accounts Hold Nearly $ 3 Billion USD

Cobinhood to Adopt Tether in Response to Banking Woes

Cobinhood to Adopt Controversial Stablecoin Tether Amid Cessation of Banking ServicesTaiwanese-based cryptocurrency service platform, Cobinhood, recently announced that its banking partners had suspended their services to the company.

The exchange claims that it “had confirmed cooperation with banks in several areas and successfully operated for a while; however, the banks had internal debates about cryptocurrencies, which they consider might create unclear effects with traditional banking operations. Despite our efforts to keep the dialogue open with our partner banks, they decided to cease the service for Cobinhood, unfortunately.”

In order to continue its operations, the company has announced that it “will start replacing USD trading pairs with USDT” and introduce “crypto-to-crypto trading.” Cobinhood states that it will “keep approaching different cooperation opportunities with various financial institutions” in the meantime, adding that the company “welcome[s] discussions with banks to open up better willingness to embrace the future crypto-economy.” The company also expressed its intention to “support multiple fiat [currencies] as soon as possible.”

Cobinood to “Buy Back” Customers’ USD

Cobinhood to Adopt USDT Amid Cessation of Banking ServicesThe company states that in order to “protect users’ right[s],” it will “buy back all the U.S. dollars in the exchange.” In order to do such, Cobinhood stated that it will first “manually cancel all the USD buying orders,” before opening “an amount of ETH/USD orders, the rate [of which] will be 10% lower than the price shown on Coinmarketcap” – indicating that company seeks to use ETH to buy back users’ fiat balances.

Cobinhood states that its USDT pairings are scheduled to launch on the 17th of February, and any customers that choose to retain their USD holdings after the introduction of Tether will have their fiat balances automatically converted into USDT starting from February 23rd.

Announcement Removed From Homepage

Since publishing the announcement just a couple of days ago, documentation explaining Cobinhood’s banking turmoil appears to have been removed from the company’s homepage – likely making it difficult for prospective customers to ascertain the quality of the company’s banking relationships.

What is your reaction to Cobinhood’s plan to continue its operations despite losing banking services? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Cobinhood


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