The developers behind the stablecoin and dollar-pegged altcoin Tether (USDT) have drawn a lot of scrutiny today after many social media users noticed that Tether has removed previous claims that the altcoin was fully backed by the USD currency. This topic has emerged in the crypto news today.
This is not the first time for people to point their fingers towards Tether (USDT). The cryptocurrency has had some hurdles over the transparency of its holdings and had guaranteed that each of the USDT tokens had an equivalent of 1 USD in the bank.
USDT was even labeled as “the opposite to fractional reserve banking” with documents further confirming the validity of Tether’s backing claims. However, a new update (unknown date) to its website suggests that USD holdings no longer cover the full supply of USDT.
“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.”
One of the such affiliated entities is the cryptocurrency exchange Bitfinex which shares leadership with the Tether stablecoin.
The Reddit field is also full of comments when it comes to Tether (USDT). One commentator there took issue with backing by anything other than USD, which they suggested compromises the entire coin’s legitimacy.
As one user with a handle u/Toyake (who also uploaded the topic) summarized:
“I guess we’re back to trusting 3rd parties, running fractional reserves, to run the market.”
A popular response even drew multiple parallels between Tether and the defunct alleged ponzi scheme BitConnect. Tether had not issued any official comments on the allegations at press time. Earlier this month, however, officials reached an agreement with the blockchain network TRON to use USDT as the platform’s native token on the end of Q2 of 2019.
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“By using Coinify, we are not running into the knife. It is still not clear to me how blockchain is any better than other database technologies. The transactions are so far more expensive and slower than a normal payment method. Decentralization brings only cumbersome improvements. None of the blockchains scale enough. But maybe I have not invested enough time and therefore understand too little how the blockchain ecosystem works.”Herren said that the decision comes after the prolonged bearish correction on the market where most of the crypto assets lost nearly a third of their value. Despite the fact that investors didn’t really get scared of the decline in prices, institutional adoption is still uncertain regarding making more profits. For example, back in 2018 in June, the Expedia hotel booking platform deleted Bitcoin out of their options and in the same year couple of months back, Reddit also stopped accepting cryptocurrency for its gold membership plans. Years back, Bitcoin became popular because of its attractiveness as a cheaper alternative for expensive payment processors. But as the technology got more popular, the network was unable to handle a higher number of transactions such as Visa or MasterCard and that’s why retailers didn’t choose crypto for making transactions. The Swiss retail giant brings bitcoin back into the retail game. However, traders who are into crypto or those who just hold on to it for better days can now use their coins to purchase something from the retail platform.
New Report Shows That Bithumb Is Laying Off 50% Of Its Staff
“Voluntary retirement is part of our support program for former employees and is intended to provide assistance and training for job placement. Apart from that, [Bithumb’s] trading volume has decreased compared to the previous year, [so] we are trying to provide internal measures. We will continue to add necessary personnel for various new businesses.”Bithumb still hasn't responded to the requests for comment. However, many speculate that this move is right because of the crypto winter which led to a lot of minuses all over the market. Still, what's interesting is that Bithumb has been preceded by many other firms in the sector - such as the mining giant Bitmain, the blockchain software company ConsenSys, the decentralized social network named Steemit as well as the similar crypto exchanges Coinsquare and Huobi - all of the companies which have decided to make significant cuts in the recent months. According to data from CoinMarketCap (CMC), Bithumb has seen more than $1.3 billion in trades over the past 24 hours. The exchange, however, was removed from the CMC global exchange rankings in January 2018 mostly because of the concerns that the site had over the reportedly "extreme divergence in prices from the rest of the world" and its fellow exchanges in South Korea. Currently, everyone is waiting for an official confirmation about the layoff from Bithumb. The respected exchange hasn't confirmed anything yet but will probably do that over the next couple of days.
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