What Is The Tether Case?

in News/Use Crypto by

Tether signifies real currencies. It is a cryptocurrency in the blockchain marketplace.

Tether was designed in November of 2015. It was initially based on the Bitcoin blockchain structure. It was later transited to Litecoin in 2017. Tether used two tokens which uses two analogs EUR and USD in the blockchain world.

In 2016, Tether’s capitalization saw a significant boost. By August 2017, it accounted for a $320 million industry. Throughout 2016, Tether didn’t see any considerable alterations in its flow. However, since April 2017, exchanges like Bitfinex has declined its transactions with fiat currencies and Tether suffered the same.

Although everything seems fine from a general point of view, the company does has a few issues to deal with. These include the official site, withdrawals, redeeming of tokens, emission, and liquidity.

But what’s Really Wrong?

For starters, you must understand that Tether can’t be used in place of cash. It doesn’t have a backup. This is one reason that the company can’t back any of the transactions with its tokens.

What’s wrong with Token Redeeming?

There have been some issues between Tether and the banking system. Not long ago, Tether suffered a cut from its Taiwanese banking partners to wire transfers. In April 2017, it also found their wire deposits in a frozen state.

A case was then filed by Bitfinex, which Tether signed in on too. It was against Wells Fargo over funding wire transfers worldwide.

Surprisingly, the lawsuit was later dropped without any official statement by any of the three companies involved.

So the question still remains –can Tether tokens be redeemed?

What about Tokens Emissions and Liquidity?

There is still not enough audit information to be sure.

Despite all these concerns, it was startling to witness that Tether capitalization still kept on growing. Tether has a policy to not mention the names of its auditors or businesses involved.

Where does the company store its cash if it doesn’t utilize bank facilities? How do tokens circulate? Why is their insufficient knowledge about the token holders? It looks like blockchain has far more concerns and fewer responses. This means that emission is excessive. Excessive emission is an indicator of unbacked tokens, which is bad for the reputation of Tether.

There are only two exchanges Kraken and Bitfinex. These offer a USDT/USD set. Bitfinex agreed on a one USD rate for a USDT. Since the volume of transactions is little, liquidity is open. This is another concern that Tether needs to address promptly.

What’s going to happen to Tether?

For now, we know that many tokens are backed without any value. Tether tokens can’t be used to purchase other cryptocurrencies. Using too many USDT tokens will affect Bitcoin rates. More connection with financial banks may raise questions about its activity. Investigation of Bitcoin can also harm Tether. All of these are concerns that must be addressed to gain the user’s trust.

As for now, it looks like the company is deemed to offer some answers for their actions.

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.