Tether, which has grown to nearly $25 bln market cap, is following the law, collaborating with the regulators, and registered with FinCEN, said Paolo Ardoino.
While the market has been making new highs, some people are still keeping to the same old FUD.
The oldest FUD lately permeating the cryptocurrency market is Tether (USDT), the popular and dominant stablecoin. With the Treasury proposing rules and regulations related to the fiat-backed cryptos and the SEC suing XRP, the market expects more action from regulators.
However, people calling out for Tether to be targeted next is not happening as Paolo Ardoino, CTO at Tether and its sister company Bitfinex, a crypto exchange, explained,
“Tether is registered and regulated under FinCEN as all the centralized competitors. Strict KYC/AML is applied to all Tether direct users, as the other main issuers are doing. Less regulated is just FUD.”
However, this hasn’t stopped people from speculating and voicing their concerns on Crypto Twitter (CT), which, according to the people involved with Tether, are baseless.
More baseless speculation. First, what “emergency?” The 354 Order was issued in April 2019. Second, the injunction — which is currently set to expire on January 15th — addressed any concerns NYAG purported to have. @Tether_to https://t.co/1MEjLI8i29
— Stuart Hoegner (@bitcoinlawyer) January 4, 2021
Tether came into existence to solve the issue of discrepancy in Bitcoin prices between different exchanges and making spreads more like traditional finance. USDT also cut down the time-consuming process of wire transfers.
Tether’s market cap has grown 6 fold in the last ten months to nearly $25 billion from $4.2 billion in April 2020.
During the 2017 bull market, Tether became big, and all the speculation around the stablecoin backing and legitimacy brought NYAG into the picture.
Tether is currently under investigation by the New York Attorney General (NYAG), but it is not for ‘pumping Bitcoin; rather, it is accused of co-mingling client funds and losing $850 million of them without disclosing any of this information to the public. This leads to Tether not being fully backed by cash reserves.
Sorry to break this to FUD spreaders. Tether and Bitfinex produced more than 2.5M documentation pages in response to requests from NYAG. Discussions are progressing well. Business as usual after the 15th of Jan. https://t.co/VoEsRuJyyP
— Paolo Ardoino (@paoloardoino) January 10, 2021
As for manipulating the market by printing Tether, it is all “nonsense” because Tether is issued when a counterparty makes a wire payment, said Ardoino on Peter McCormack’s podcast, What Bitcoin Did.
According to him, the growth of Tether is just driven by the actual demand of Tether’s market, so the entire manipulation thing is nonsense. He further added that during the last bull run, crypto saw a “boom of interest in retail that made the crypto going balloon,” and that’s just it.
Trader and economist Alex Kruger says that while the “NYAG argues tethers are a commodity,” the whale Tether drama doesn’t have any market impact.
Recently, the lending rates on Bitfinex went to 7% per day, which led many people to speculate that the company is run out of USDT.
However, it is USD that it ran out of because of “big users re-balancing their longs against USD,” clarified Ardoino. Also, the accounting delay, along with the massive size, can cause a delay in the lending books.
Overall, Tether is following the law, collaborating with the regulators, and registered with FinCEN, said Ardoino.