Tether FUD: USDT is Regulated and Market Manipulation Accusation is Just “Nonsense,” says CTO

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.

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.

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.

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Author: AnTy

Ripple Partner MoneyGram ‘Doesn’t Utilize ODL or RippleNet’ Despite Being Paid Millions in XRP

Ripple Partner MoneyGram Says it ‘Doesn’t Utilize ODL or RippleNet’ for Which it was Paid Millions in XRP

“It’s still business as usual,” says Ripple CEO, maintaining that the company remains “on the right side of the law and of history.”

Amidst the ongoing distancing from XRP, Ripple partner MoneyGram also issued a statement.

“The Company has not currently been notified or been made aware of any negative impact to its commercial agreement with Ripple,” said MoneyGram, one of the largest companies involved in cross-border P2P payments and money transfer.

The statement came in light of the recent lawsuit filed by the U.S. Securities and Exchange Commission against Ripple Labs Inc.

“MoneyGram is not a party to the SEC action,” said the company adding, they will continue to monitor for any impact as things unfold.

MoneyGram came into a commercial agreement with Ripple in June 2019 to use the fintech’s foreign exchange (FX) blockchain trading platform, On-Demand Liquidity (ODL) for the purchase or sale of four currencies. For this, Ripple paid millions of dollars in XRP to MoneyGram. However, the company revealed that, as a matter of fact,

“MoneyGram does not utilize the ODL platform or RippleNet for direct transfers of consumer funds – digital or otherwise.”

Throughout this collaboration, MoneyGram actually continued the use of other traditional FX trading counterparties and says it “is not dependent on the Ripple platform to accomplish its FX trading needs.”

“There were a discussion on Twitter about precisely how MoneyGram used ODL, other ways they could use it, and the advantages and disadvantages of each mechanism,” commented David Schwartz, CTO of Ripple on MoneyGram distancing itself from the company.

This week, XRP got into hot water as the SEC charges Ripple and its two executives, board member and former CEO Chris Larsen and current CEO and board member Brad Garlinghouse for allegedly selling unregistered securities.

This resulted in the price of the digital asset crashing more than 60% and taking the entire crypto market down with it, only to recover the gains to trade around $0.30 XRP -6.52% XRP / USD XRPUSD $ 0.30
-$0.02 -6.52%
Volume 9.97 b Change -$0.02 Open $0.30 Circulating 45.4 b Market Cap 13.43 b
6 h Ripple Partner MoneyGram Says it ‘Doesn’t Utilize ODL or RippleNet’ for Which it was Paid Millions in XRP 10 h Oldest Crypto Exchange Bitstamp to Suspend XRP Trading & Deposit on Jan. 8 2 d XRP Carnage Begins as the Delisting Commences
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All of this also resulted in the suspension of XRP trading and deposits on several trading platforms. Just yesterday, the oldest crypto exchange Bitstamp suspended the XRP services for its US customers, starting January 8.

OSL, Beaxy, and CloseTowers are other exchanges that suspended XRP trading on their platform while Bitwise Asset Management also liquidated its position in the digital asset.

Garlinghouse meanwhile, maintains that Ripple remains “on the right side of the law and of history.”

“It’s still business as usual,” said Ripple CEO in a publicly shared note sent to the company’s employees this week.

“The SEC is completely wrong on the facts and law and we are confident we will ultimately prevail before a neutral fact-finder.”

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Author: AnTy

Top US Financial Regulators Call for On-Chain Stablecoin KYC

US regulators’ parting shots keep on coming, which has “zero chance” of becoming an “enforceable rule of law any time soon.”

Top US financial regulators issued a statement calling for on-chain stablecoin KYC.

The latest statement came just a few days after the fiasco of FinCEN’s proposal to extend anti-money laundering (AML) regulation to non-custodial wallets, for which the regulator is now accepting public comments with a deadline of January 4.

Now, regulators are back with their AML rules which now target stablecoins. In a statement on Wednesday, the Treasury Department and other agencies said,

“[Stablecoins] should have the capability to obtain & verify the identity of all transacting parties, including for . . . unhosted wallets.”

The regulators want the stablecoin to be used in a way that manages risk and maintains the stability of the financial and monetary systems. Jake Chervinksy, General Counsel at Compound Finance said,

“There’s exactly zero chance this becomes an enforceable rule of law any time soon. This is just more of Secretary Mnuchin’s personal views coming out on pretty-looking stationery before his tenure ends.”

The statement is released by the President’s Working Group on Financial Markets, whose members include the Federal Reserve, the heads of Treasury, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

In its comprehensive statement, the group says that stablecoins may be securities, commodities, or derivatives, depending on the specific qualities of a particular asset.

And when these fiat-backed cryptos are used for retail payments and at a “significant scale” in the US, “the associated risks may require additional safeguards,” the regulators said.

The group further said that the backers of stablecoins should obtain and verify the identities of all parties involved in a transaction. Also, they need to have “strong reserve management” to handle large-scale redemption.

The members also acknowledged that stablecoins have the potential to enhance efficiency, lower costs, increase competition, and foster broader financial inclusion. Treasury Deputy Secretary Justin Muzinich said,

“The statement reflects a commitment to both promote the important benefits of innovation and to achieve critical objectives related to national security and financial stability. Regulators will continue to look closely at stablecoin arrangements, and look forward to a future dialogue on these issues.”

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Author: AnTy

Bitcoin’s the Most Crowded Trade After Long Tech and Short US Dollar: BoA Survey

Bitcoin’s over 170% YTD rally has everyone rushing in, which makes it one of the most crowded trades of December 2020, according to Bank of America (BOA).

The investment banking giant revealed its latest survey findings, according to which about 15% of fund managers with $534 billion under management said Bitcoin is the third-most crowded trade.

The first spot was taken by long technology shares and the second – shorting the US dollar. The survey was taken between Dec. 4 and Dec. 10. Longing corporate bonds and gold are also among the most crowded trades.

“At a market cap of $360B in a world of $17T negative-yielding debt, by definition, BTC is not the most crowded trade,” noted analyst Qiao Wang.

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The largest cryptocurrency surged to its all-time high at the beginning of this month after rallying more than 80% in October and November. Following the strong rally, Bitcoin has taken to ranging this month only to rally to over $20,800 today.

The rally was particularly started by Square making a $50 million investment in Bitcoin, after MicroStrategy’s big bet on the digital asset, which has now gone well above $1 billion. PayPal announcing support for cryptocurrencies also helped push the price of them higher.

All of this has brought the attention of the mainstream firms to the crypto market. From legendary investors like Paul Tudor Jones, Stanely Druckenmiller, and Bill Miller, to Guggenheim Partners, MassMutual, and many others, everyone is onto Bitcoin this year.

These investments are actually “laying out the groundwork for how you add Bitcoin to your balance sheet, how you should think about Bitcoin as a substitute for cash,” said New York-based CoinFund’s managing partner, Seth Ginnis, in a webinar this week.

This is evident from the fact that the market is being driven by North American institutional investors, as per Philip Gradwell, the chief economist at Chainalysis.

And still, as JPMorgan said, Bitcoin’s institutional adoption has just begun.

JPMorgan’s recent report said that the $100 million Bitcoin investment by insurance behemoth means the leading cryptocurrency could see $600 billion in additional demand.

Ginns also reported seeing a lot of interest from hedge funds and getting calls from pension plans, endowments, family offices, and foundations, suggesting the continued trend of broader institutional adoption next year.

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Author: AnTy

Andre Cronje’s Yearn.Finance Confirms Fifth Partnership with DEX SushiSwap

It’s another day and another merger for Yearn.Finance, which just notched up its fifth major collaboration in a week.

In a blog post from yesterday, yearn founder Andre Cronje confirmed that the decentralized finance (DeFi) protocol had collaborated with decentralized exchange (DEX) SushiSwap.

Overlapping Developments and a Path Forward

SushiSwap is a fork of DEX Uniswap. In his blog post, Cronje explained that Yearn and SushiSwap had overlapped in recent developments. SushiSwap has expanded on its automated market maker (AMM), and Yield has broken bonds with its money market and yield strategies. With so much overlap in the systems, Cronje claimed that they could take their relationship to the next level.

Under the new merger, both protocols have agreed to share resources. The total value locked in both protocols will also increase, and the collaboration will see Yearn strategies use SushiSwap going forward.

Also prominent in the new marriage is that SushiSwap will help Yearn launch Deriswap, a new product from Cronje. Announced last week, DeriSwap is a protocol that combines different aspects of DeFi. It focuses primarily on options, swaps, futures, and loans. While Cronje offered scant details about the protocol, he pointed out that it would use the standard Uniswap contract, with liquidity providers offering ETH-BTC. When traders swap tokens, liquidity providers earn fees.

Beyond the developments already laid out, Cronje also highlighted that users would need to vote on several new ones. These include Yearn participating in SushiSwap’s governance and adding SUSHI tokens to its treasury and vice versa. Developers are also proposing grants for Sushi contributors, which will be paid via yGift, and more.

Yearn’s Landmark Week

This appears to be the one merger that doesn’t have to do with any other announced by Yearn Finance in the past week. So far, Yearn’s SushiSwap collaboration is it’s fifth in a week, demonstrating the protocol’s seriousness about expanding its footprints across the DeFi space.

Yesterday, the lending and savings protocol Akropolis confirmed that it had partnered with Yearn to develop its operational strategies.

The protocol will benefit from the expanded Yearn ecosystem, including names like lending protocol Cream and insurance market coverage provider Cover.

Yearn is expected to benefit from Akropolis’ business development infrastructure and institutional contacts. Akropolis will deprecate AkropolisOS and Spark, two of its products that aren’t related to yield farming. Both products will be moved to open-source development and incorporate front ends to allow professional traders to access the new ecosystem from Akropolis and Yearn.

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Author: Jimmy Aki

Ethereum Classic Labs Rolls Out Wrapped ETC (wETC); Opening Up The DeFi Marke

Ethereum Classic has announced the launch of wrapped ETC (wETC) to act as a gateway to the Ethereum blockchain, which today is a major playing field of Decentralized Finance (DeFi) applications. The announcement, which came on Wednesday, means that ETC users will have seamless access to the DeFi ecosystem without converting their tokens.

Recent months have seen the DeFi space grow exponentially as more stakeholders bet on its long term value. Unsurprisingly, the trend is catching with other crypto projects, including BTC, which already found its way to DeFi through wrapped Bitcoin (WBTC). In fact, DeFi Pulse metrics show that WBTC is the second most locked asset in the $13.5 billion DeFi TVL.

ETC Joins the Ethereum DeFi Bandwagon

The recently released wETC is an ERC-20 token, hence compatible with the Ethereum blockchain and DeFi applications, ranging from DEXes, lending, and derivatives. Basically, ETC users will now be able to stake their tokens on Ethereum and leverage the varied DeFi services within the ecosystem. ETC Labs CEO and Co-founder James Wo said that the milestone would at least attract 10% of ETC holders,

“We wanted to make sure ETC could go to a different ecosystem and use different applications on top of that ecosystem … I expect at least 10% of ETC holders will want to participate and use wETC.”

Notably, Ethereum Classic emerged from the Ethereum 2016 hard fork, triggered by the DAO hack. It now appears that the two communities are ready to work together despite Wo’s stance that ETC will maintain a Proof-of-Work consensus as Ethereum shifts to a Proof-of-Stake mechanism,

“Not everyone trusts PoS. Some projects believe in PoW … So I think some of the ecosystems will probably stick to ETC or other PoW versions of a blockchain that can make smart contracts.”

The Token Wrapping Concept

As the blockchain and crypto industry evolves, interoperability solutions have been at the forefront of most innovations. The concept of wrapping tokens and using them on a different blockchain has changed the industry, especially with the growth of an ecosystem like Ethereum. Basically, this involves issuing a blockchain asset such as Bitcoin on a different blockchain-based on a 1:1 representation.

The wrapped crypto asset can then perform various functions given its compatibility with a particular blockchain ecosystem. In the wETC case, users will transfer their wrapped tokens to the Ethereum blockchain via chainbridge, an interface for both ecosystems. A similar amount will be minted for use within the Ethereum ecosystem, after which they will be destroyed when users convert their tokens back to ETC.

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Author: Edwin Munyui

Ripple CEO: ‘Jumped the Gun’ Predicting Banks Would Start Using ODL

While Ripple jumped the gun in predicting a spectacular 2019, this year, which was expected to be a challenging one, is actually doing well, said Ripple CEO, Brad Garlinghouse.

“We aren’t going to grow as fast this year as we thought. However, we’re still getting two production financial contracts a week,” said Garlinghouse in an interview with The Scoop.

“Obv jumped the gun when I predicted 2019 was the year banks would use ODL,” Garlinghouse said on Twitter.

It was recently revealed that Ripple had bought $46 million worth of XRP for the first time in the Q3 of 2020, as such increasing the price of the cryptocurrency.

XRP is currently trading at $0.272, up only 40% YTD, still down more than 93% from its all-time high.

The company, which already owns about half of the digital asset’s supply, made the purchase to support “healthy markets.”

It stated in its quarterly report that Ripple might continue to purchase XRP to support its newly launched product, Line of Credit, that allows its ODL customers to buy XRP on credit from the company.

The report also revealed that Ripple sold $35.84 million worth of XRP to its ODL customers in Q3 but again, no programmatic sales were made.

During the interview, Ripple CEO said the non-transparent regulatory is keeping the company from reaching its potential and that there isn’t a “level playing field” for all the digital assets.

“Bitcoin was the only one with the hall pass,” he said, adding Ripple is “fighting with one hand tied behind our back.”

For some time now, Ripple has been considering moving out of the US to a country that has more regulatory clarity. Already, it has opened a new regional headquarters office in Dubai International Financial Centre.

“Once banks have regulatory clarity, there’s little doubt in my mind that they’ll use these technologies,” tweeted Garlinghouse.

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Author: AnTy

Tezos ‘Delphi’ Upgrade Makes it More Attractive For Defi Projects; Reducing Gas Price By 75%

Tezos has completed the Delphi upgrade, which many believe would make the blockchain a hub for defi projects. As per the official announcement, the Delphi upgrade has brought down the gas fees significantly, allowing users and developers to deploy more complex smart contracts on the platform.

The Delphi upgrade is believed to bring down the gas fee by a whopping 75% along with a four-times lower storage cost.

Tezos network makes use of gas just like Ethereum, but with a different implementation. While the Ethereum blockchain uses gas as a transaction fee, the Tezos network uses it as a limit setter for the consumption of computing power for a transaction. However, the transaction cost is determined by the amount of gas used for that transaction.

Gabriel Alfour, the lead developer at Marigold—and one of the core development teams that worked on Delphi, explained the importance of the lower gas fees and how it can propel the Tezos network to be a leading blockchain when it comes to the deployment of complex smart contracts. He said,

The motivation for such an interim proposal is straightforward. The size and complexity of smart contracts is limited by gas constraints, and so people attempting to build contracts with rich functionality have needed improvements to those constraints for some time.

Thus, such improvements are crucial to enable novel applications on Tezos that target areas like DeFi (“Decentralized Finance”), collectibles, and gaming.

Luckily, in August, we finalized some long-standing work on improving the performance of the Michelson type checker and interpreter, and on refining the cost model, thus mitigating the gas problem.

Growing gas fees due to the network congestion has been a substantial problem for Ethereums mainnet since defi gained traction, and its volume increased significantly. While the launch of ETH 2.0 is believed to solve many of the scaling problems for Ethereum, in the meantime, other blockchains such as Tezos can attract higher numbers of customers to its platform.

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Author: Hank Klinger

Bitcoin Payment Processor Rolls Out ‘BitPay Send’ to Allow Companies to Pay With Crypto

BitPay has announced a new product dubbed ‘BitPay Send,’ which enables companies to make crypto payments without necessarily holding digital assets. The crypto payment services provider targets extending its clientele portfolio with BitPay Send to bridge the gap that exists when it comes to paying for labor or services in crypto.

Powered by a blockchain ecosystem, the BitPay Send platform is built to increase efficiency in crypto payments and target companies of all sizes. This innovation facilitates massive payments such as the ones companies make to contractors, vendors, customers, affiliates, and employee salaries. Given the growing nature of the distributed economy, BitPay Send poses as an ideal platform for companies that source talent, especially from the gig economy.

Per the current systems, transactions can be extremely slow and costly, especially when a cross-border operation is involved. BitPay Send solves this challenge by supporting round the clock crypto payments across the globe. BitPay CEO, Stephen Pair, noted the high rate of blockchain payments adoption, which he attributes to the ease of sending and receiving payments globally. He added that,

“Traditional international payment methods are cumbersome, costly, and slow. With BitPay Send, companies can make mass payouts without having to buy, own or manage crypto and their recipients receive payments quicker and at a lower cost.”

BitPay Send is already in use by AdGate Media, which leverages the facility to make crypto payments to its affiliates. Basically, BitPay assumes the conversion risk, while AdGate only makes a fiat deposit paid out to an affiliate in crypto. Dan Sapozhnikov, the President of AdGate Media, was keen to highlight the value proposition by BitPay Send in their line of business,

“We have lots of affiliates who wanted to be paid in Bitcoin, especially those who are based outside North America and Europe where access to bank accounts is difficult …

having BitPay manage that risk was an important factor in choosing BitPay Send.”

Notably, recipients will only require a BitPay ID and crypto wallet hence the whole notion of eliminating banks as intermediaries. BitPay, which has been operational since 2011, enjoys the backing of prominent investment firms, which include Virgin Group, Index Ventures, and Founders Fund.

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Author: Edwin Munyui

Bitcoin & Digital Currencies Won’t Succeed: Founder of World’s Largest Hedge Fund

Ray Dalio continues to have his concerns about Bitcoin, which he doesn’t prefer over the traditional safe-haven gold, unlike the latest converts like legendary investors Paul Tudor Jones, Stanley Druckenmiller, and Ben Miller.

In his latest interview with Yahoo Finance, the founder of the world’s largest hedge fund Bridgewater Associates shared his views on digital currencies, which he said is of two types; the first one is the bitcoin type of currency, which will be an “alternative currency in terms of its supply & demand and an alternative storehold of wealth.”

The second ones are the digitized version of fiat currencies, central bank digital currencies (CBDC), and “we’re going to see a lot more of that,” he said.

But his problem with Bitcoin is that though theoretically, it’s good to be a currency, it has to be an effective medium of exchange, store hold of wealth. Moreover, governments want to control it.

He argued, “I can’t take my bitcoin yet and go buy things easily with it.” As for being a storehold of wealth, it is volatile, and so much of it is based on pure speculation as such not an effective one at that, making it not suitable as a “transaction vehicle.”

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Interestingly, while BTC has recorded +120% year-to-date performance, Bridgewater Pure Alpha II Fund is down by 18% YTD.

Another problem with Bitcoin, according to Dalio, is, “if it becomes material, governments won’t allow it. I mean they’ll outlaw it.”

“They’ll use whatever teeth they have to enforce that they would say you can’t transact the bitcoin, you can’t have a bitcoin,” which would make one a felon to use it. He points out how governments even outlawed gold.

Cash is a Risky Asset

According to Dalio, gold will be a vehicle that central banks and countries will use as an alternative to cash, which won’t be devalued by printing it, and already the precious metal is the third-largest reserves of the US.

“I don’t think digital currencies will succeed in the way people hope they would,” he said.

His views on digital currencies are based on the “new era of monetary policy” we are in, which he believes is the third one where the free market will play a much less role in determining capital market flows.

“The two dimensions of the big change environment you’re going to see: much more government influences and direction of where money goes,” said Dalio, adding “the government will play a bigger” which means there’ll be much more debt that is monetized and that has implications for the value of financial assets and the value of the currencies.

By printing the money, governments have already diminished the value of cash and the value of bonds as they promise to receive a lot of currency, Dalio said.

All of this is shifting wealth to financial assets and, as always, sends stocks and gold higher. Another clear thing is that “cash is a risky asset,” he added.

“So many people think if I go to cash, I’m going to be safe because it’s much less volatile, but please realize in this environment of producing a lot more cash the real returns go down, it’s a seductive risk, risky asset,” because of inflation, said Dalio.

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Author: AnTy