Tether’s USDT is once again the target of crazy rumors after the disappearance of the twitter account of its CEO, Mr Van der Velde.
Tether is once again embroiled in a story that may have repercussions for the entire market. But if you have USDT then beware. Because this time. it could be the end of the stablecoin the most famous in the world.
The stories, this cryptocurrency has had a lot. And that has never stopped him from staying in the top 5 of the biggest market cap. Yet what has just happened is worrying to say the least. Do you have Tether in your wallet? Are you staking with Tether? So read on, because you might want to sell it all in the next few minutes.
Tether, a very unstable Stablecoin
- Following the publication of a Bloomberg article, the twitter account of the CEO of Tether has disappeared.
- Bloomberg’s investigation targeted Tether’s liquidity reserves.
- The company behind the USDT is supposed to have $ 69 billion in reserve
- This survey asks the question “who has ever seen the liquidity of tether?”
- Would this deletion have the sole aim of avoiding controversy?
Bloomberg attacks Tether reserves which are supposed to support USDT’s significant liquidity. According to the survey, this liquidity is backed up with different types of assets, some of which are problematic. For example, Chinese debt.
Tether CEO Jan Ludovicus van der Velde’s @urwhatuknow twitter account no longer exists. Did he delete his account himself or is it the action of a communication manager?
A last mysterious tweet, which can still be viewed in the archives, was published on October 4. In this message, Van der Velde already calls out to a “financial magazine” and defends himself against “rumors”. And this, almost a week before the release of the article.
Another enslaved and dying financial magazine that tries to make up rumors about #Tether in order to make some money and delay its extinction for a few days, stay tuned… .. #dinosaurs
Van der Velde’s speeches and public appearances were already rare, if not nonexistent. So much so that some people wonder if the character really exists. Indeed, pseudonyms are common in the world of cryptocurrencies (Hello Mr. Satoshi Nakamoto!)
Yet the Tether company is often at the heart of controversy, alongside another related company, Bitfinex.
To read: Bitfinex pays $ 37 million to transfer $ 100,000!
For more information – see our guide “Invest with eToro“.
What conclusions to draw for the public?
This isn’t the first time Tether has faced issues. The question of liquidity is one of the main sources. In 2017, Bitfinex had serious liquidity problems to ensure exchanges through its platform. In this case, we suspected theUSDT to have been used to manipulate prices by massively buying Bitcoin. Independent experts had also highlighted correlations between the price of Bitcoin during the bull run of 2017 and the creation of stablecoin USDT. A bit like central banks which print dollars to buy back debt and stocks.
Except that crypto was built in opposition to this system, at the heart of the crisis of subprime in 2007. So that was a particularly negative signal for Tether, Bitfinex and the market as a whole.
More recently, the USDT broke away from the Dollar. Indeed, to ensure liquidity, the company is not required to have a dollar against a USDT. It can have assets, debt, foreign currencies. In short, a wide range of choices.
This is where the problems come back. It seems that among all the possible choices, Van der Velde did not do all the right ones. By going for Chinese debt, the stablecoin may have exposed himself to additional concerns.
In any case, this is what Bloomberg suspects, which is not limited to doubts. According to the newspaper, the assets held by Tether do not cover the 69 million stablecoin in circulation. And therefore, the USDT is “a fraud”.
It is in this context that the CEO’s twitter account disappeared from radar. However, several possibilities can explain this sudden reaction.
- Above all, what comes to the minds of the oldest investors is the Classico Exit Scam.
But Tether is not really represented by its CEO. At least not publicly. And other more prominent figures are still active on the social network, such as technical director Paolo Ardoino.
- Another possibility is preventive action to avoid controversy.
Indeed, having a public figure makes it possible to concentrate the attacks of the “antis”. A bit like a Turk’s face. But then again, Van der Velde isn’t really Tether’s Mark Zuckerberg.
- A third more conceivable solution is the preparation of a legal conflict.
Over the years, crypto and blockchain companies have come under attack from the mainstream press. The latter did not understand, or simply opposed the free world of cryptocurrencies. These attacks have damaged many projects. But today, these companies are worth several billion dollars.
To read: Facebook action is down, the Right Time to Buy?
And these billions are used as well to develop projects as to defend against the old world. Legal retaliation has become a common weapon in the blockchain world. Binance had filed a lawsuit against Forbes after slanderous articles.
In a context of legal confrontation, it is likely that Tether will seek to control each message and social network in order to better prepare its response. In addition, by deleting the account, the company is pulling the rug out from under the feet of its attackers, who could have been looking for grain to grind in old tweets.