Tether is in the spotlight amid a gigantic retreat into the cryptocurrency market

The 50 Major cryptocurrencies experienced massive price corrections last week. Total market capitalization fell to just over $ 400 billion at the time of writing, in a context of general uncertainty. Almost eclipsed, but not forgotten, is the news that Bitfinex and Tether received quotes from US regulators in December, who took their eyes off the exchange and cryptocurrency. concerns raised over the past few months compared to the increase in the offer of Tether that corresponded to occasions in the market. Bitfinex, which is the largest stock exchange in the world, has threatened to take legal action against parties who have accused the exchange of misconduct.

The reason for the allegation is quite predictable. Bitfinex issues Tether tokens that are issued for US dollars on a ratio of 1: 1. In simple terms, Bitfinex has been accused of not having a dollar reserve of 1: 1 for issued Tether chips.

The problem is that because a Tether token equals one dollar, it was used to buy other cryptocurrencies. normalized value. This resulted in suggestions that the price of Bitcoin and other cryptocurrencies had been inflated because people had bought cryptocurrencies with Tether and not the actual US dollars. If Bitfinex does not have an equal supply of dollars to back up the number of existing Tether chips, things could go wrong.

As cited by the NYTimes, Joey Krug, Co-Chief Investment Officer of Pantera Capital, said:

"This has become more and more of a concern, because every time As the markets collapsed, you saw the same thing happen, which could mean that much of the December and January rally could not have been real. "

Cointelegraph reported in November 2017 that Tether had seen a 10,000 percent increase in supply in the space of a year, which seriously undermined the way the company behind Bitfinex and Tether had increased its value in such a short time.Tether has already claimed that he had $ 2.2 billion in reserve, saving the numbers posted on his online transparency page.Tether finally hired Friedmann LLP to conduct an audit in order to put an end to the worries Regarding the legitimacy of its reserves

To complicate matters, news revealed this week that the relationship between Tether and the audit firm was over. not clear what led to the breakup of this relationship. More importantly, there is no word on what Friedmann LLP found during their audit.

The Tether crash will not be cataclysmic, says Litecoin founder Charlie Lee

Lee said that the fact that the Tether chips (USDT) continue to 39 to be issued after the Commodity Futures Trading Commission issued their subpoena in December 2017 is a good sign. However, he warned that if it turned out that there is not enough reserve of dollars to support the Tether chips, the price of the token will collapse completely. But most importantly, Lee believes that the eventuality will have no direct effect on Bitcoin and the rest of the cryptocurrency market.