Tag: Tether Limited

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Crypto Videos

Tether & Its Controversies – Is Your Money At Risk?

https://youtu.be/Dgxi9lC6QyA

Tether and its controversies
Before talking about how does Tether work, we have to know what it is.
Tether is a blockchain-based stable cryptocurrency backed in fiat currency.

https://youtu.be/Dgxi9lC6QyA

Tether and its controversies
Before talking about how does Tether work, we have to know what it is.
Tether is a blockchain-based stable cryptocurrency backed in fiat currency.


Tether and its controversies

Before talking about how does Tether work, we have to know what it is.
Tether is a blockchain-based stable cryptocurrency backed in fiat currency. Tether is backed by the US Dollar, which is all held in a designated bank account. Tether tokens are traded under the USDT ticker symbol.

Tether was first launched under a different name. It was called RealCoin when it first came out in July 2014. However, it was quickly renamed to Tether in November by Tether Ltd. Tether Ltd. is the company that maintains the reserve amounts of fiat currency. Tether started trading in February 2015.


In-depth explanation

Tether is the leader of the new type of cryptocurrencies called stablecoins. Stablecoins are created to keep cryptocurrency valuations stable, as most cryptocurrencies fluctuate too much in price to be considered viable currencies. Low volatility would allow stablecoins to be used as a medium of exchange rather than as a medium of speculative investments.
There are many forms of stablecoins, and Tether specifically belongs to fiat-backed stablecoins. As previously said, the US Dollar backs each Tether token in circulation. Tether was created to build the bridge between fiat currencies and cryptocurrencies. It is supposed to offer stability, transparency, and minimal transaction charges to its users. Tether is pegged against the US Dollar and maintains a 1-1 ratio in terms of value and price. However, there is no guarantee whatsoever provided by Tether Ltd. that users can exchange their Tether tokens for US dollars.

According to CryptoCompare data cited by The Wall Street Journal, somewhere around 80% of all Bitcoin trading is currently done in Tether. If this is true, Tether would be considered a major source of liquidity for Bitcoin as well as the cryptocurrency market in general.


Controversies on Tether

Tether was known for its controversies throughout its history. It allegedly got hacked for $31 million worth of Tether tokens, which made the company fork the coin to create a rollback. This event happened in November 2017.

This is not the end of controversies with Tether. Another controversy happened as the audit that was created to ensure that the fiat reserve is maintained never took place. Instead, Tether announced it was parting ways with the firm that was supposed to audit them. Right after that happened, Tether was issued a subpoena by financial regulators. This event happened in January 2018.


In April 2019, New York Attorney General Letitia James accused the parent company of Tether Ltd. as well as the operator of cryptocurrency exchange Bitfinex of hiding tremendous losses from its investors. Allegedly, Tether hid a loss of $850 million from its investors.

Tether has always been a center of attention when it comes to controversies. Many people are still insecure about whether it is backed by fiat currency or not. As there is no real evidence of whether the fiat funds exist, no one can say for sure. However, Tether remained a stable cryptocurrency for quite some time. So far, it has been a safe haven for traders and investors that want to move their funds away from volatile cryptocurrencies when the bear market approaches, without actually exchanging the cryptocurrencies for fiat. This way, they are avoiding various exchange and transaction fees.

Tether token is transacted on many popular cryptocurrency exchanges such as Binanace, BitFinex, and Kraken.

Categories
Crypto Guides

Learning The Fundamentals Of ‘Tether’ – The Stable Cryptocurrency!

Introduction
Tether is a cryptocurrency founded in 2015, and it was initially known as ‘Realcoin.’ Tether tokens are issued by Tether Limited, a company based in the British Virgin Islands

Introduction
Tether is a cryptocurrency founded in 2015, and it was initially known as ‘Realcoin.’ Tether tokens are issued by Tether Limited, a company based in the British Virgin Islands

Introduction

Tether is a cryptocurrency founded in 2015, and it was initially known as ‘Realcoin.’ Tether tokens are issued by Tether Limited, a company based in the British Virgin Islands as per the New York Times. The official website says the company is incorporated in Hong Kong, with offices in the US. This company is associated with the Bitfinex, a Hong Kong-based cryptocurrency exchange, which is also one of the biggest in the world. Many members who are on the board of Tether Limited are associated with Bitfinex exchange, as well.

Objective

The value of any cryptocurrency is volatile. We can see the steep increases and decreases in the value of any crypto within a matter of days or hours, as well. We know that these Cryptocurrencies offer a wide range of features that fiat currencies don’t assure.  Therefore, Tether was designed as a stable coin promising the stability of fiat currency with the features of a cryptocurrency as well. Tether is meant to be backed one for one by some of the major fiat currencies like USD, Euro, JPY, etc. If we take the example of USD, the value of each Tether is always one dollar (USDT). For every one tether created, one US dollar is stored as a reserve.

Importance of Tether in the crypto world

Many crypto exchanges across the globe find it extremely difficult to work with traditional banks. The exchanges find it challenging to store USD or any conventional fiat currency as reserves for the payments. Hence major crypto exchanges like Bitfinex hold clients balance in Tether rather than in USD. This means, if the clients hold any money in the exchange and don’t have any open positions, that money is held as Tether in the exchange. It is converted into USD only when the client wants to redeem the cash. Hence Tether offers to be a stable alternative for USD for the crypto exchanges across the world.

Market Cap

Tether is in the fifth position in terms of market cap in the crypto world with a value of more than $4 billion. The price of each Tether is stable and is one dollar or Euro, etc. as described above. The average 24-hour trading volume is just above $43 billion, while the circulating supply is around $4.1 billion in the market as on 1st Nov 2019.

Controversies

Tether has a fair share of controversies in its kitty. As the central banks hold the appropriate amount of gold reserves equivalent to the new currency issued in the market, Tether Limited holds the equivalent amount of US Dollars in its reserve for the Tether coins circulated in the market. Lately, there are claims that the company doesn’t hold enough reserves in USD, claiming Tether Ltd haven’t been too transparent with the audits as to where and how much of the reserves have been stored in different places.

The December 2017 Bitcoin price surge is also attributed to be the work of the Tether limited. It is alleged that the company has created Tether coins out of thin air and bought Bitcoin at a lower price, eventually attributing the price surge of the currency. Thus, there are growing fears in the crypto market that if there are no adequate reserves of USD backing the Tether, the value of the coin should be determined by the market rather than maintaining it stable. Despite all these controversies, this cryptocurrency is still one of the most traded ones in the crypto space because of its stability factor.