Category: Tether

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Crypto News Stablecoins Tether

Tether FUD Finally Over Amid Recent Partnership With Top 5 Accounting Firm?

An independent review from global accounting giant BDO has reported that the stablecoin issuer’s total assets exceed its consolidated liabilities. Will the FUD finally go away or stick around independent of evidence?

Top Five Accounting Firm Gives Stamp of Approval

Tether has made available its latest quarterly assurance opinion completed by BDO, a top five-ranked global independent public accounting firm. The attestation reaffirms the accuracy of the firm’s reserves report, which breaks down the assets held by the group as of June 30, 2022.

As of that date, BDO confirmed a more than 58 percent decrease in Tether’s commercial paper holdings over the prior quarter, from US$20 billion to US$8.5 billion. During the same period, the company increased its holdings of cash and bank deposits by 32 percent.

The attestation revealed a continued reduction in commercial paper investments and is said to demonstrate that “the group’s consolidated assets consistently exceed its consolidated liabilities, despite market capitulation in Q2 2022, which led to cascading failures across the industry”.

Further, the note suggests that “emerging from this black swan event [market capitulation, kicked off by Luna], Tether demonstrated its resiliency and continued commitment to transparency, dependability and commitment to removing commercial papers from reserves”.

Management noted that as of June 30, total assets exceeded total liabilities, and highlighted a figure of US$66.2 billion in relation to digital tokens issued.

Paolo Ardoino, Tether CTO, said:

We are fully committed to maintaining our role as the leading stablecoin in the market. Our commitment to transparency and the community is a longstanding pillar in the underlying ethos of the company and aligns with our responsibility as a market leader. We have once again demonstrated that commitment by aligning with BDO, one of the world’s top accounting firms.

Paolo Ardoino, CTO, Tether

‘Tether Truthers’ Silenced

So-called “Tether Truthers” have long asserted that Tether is a fraud and that its collapse would result in the entire crypto market unravelling. To date, that has proven to be a belief lacking in credence, even more so after this latest attestation.

This news would have been poorly viewed by at least one hedge fund, which accumulated a massive short position betting on its its decline. It seems no matter the evidence provided, Tether FUD is one of those persistent issues that are hard to dispose of, once and for all.

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Ethereum Stablecoins Tether USD Coin

USDT and USDC Stablecoins Throw Weight Behind ETH’s Transition to Proof-of-Stake

As Ethereum prepares itself for ‘The Merge‘, set for September 19, Tether (USDT) and Circle, issuer of the USDC stablecoin, have pledged their full support for the long-awaited transition.

The Merge will see the platform move from an energy-intensive proof-of-work (PoW) consensus mechanism to a more sustainable proof-of-stake (PoS) mechanism that will improve the efficiency of the project and dramatically reduce its environmental impact.

In a statement released on August 9, Tether labelled the transition one of the “most significant moments in blockchain history”, saying:

Tether believes that in order to avoid any disruption to the community, especially when using our tokens in DeFi projects and platforms, it’s important that the transition to PoS is not weaponised to cause confusion and harm within the ecosystem.

Tether statement

Smooth Transition ‘Essential’ for Long-Term DeFi Health

The firm added: “Tether will closely follow the progress and preparations for this event and will support PoS Ethereum in line with the official schedule. We believe that a smooth transition is essential for the long-term health of the DeFi ecosystem and its platforms, including those using our tokens.”

The announcement from Tether came on the same day as its stablecoin competitor USDC, which announced it would only support Ethereum’s highly anticipated upgrade. The issuer of USDC, Circle, views the Merge as an important milestone in the scaling of Ethereum’s ecosystem, saying in its own statement:

USDC has become a core building block for Ethereum DeFi innovation. It has facilitated the adoption of L2 solutions and helped broaden the set of use cases that today rely on Ethereum’s vast suite of capabilities. We understand the responsibility we have for the Ethereum ecosystem and businesses, developers, and end users that depend on USDC, and we intend to do the right thing.

Circle statement

As Support for Ethereum PoW Fork Increases, Buterin Not Too Bothered

The transition to a PoS blockchain means Ethereum will be effectively eliminating its mining for good, opting instead to rely on a trusted network of validators. While the majority of the community is excited about the upcoming event – none more so than Ethereum co-founder Vitalik Buterin – miners who stand to lose their income are suggesting another potential hard fork will continue the PoW mechanism. Buterin scoffs that proponents of a PoW “want to make a quick buck” and that it is “unlikely to succeed”.

Binance, the world’s largest cryptocurrency exchange by volume, has said it would not rule out support for the controversial fork, saying that while it shares the excitement for the Merge, it would also possibly support the “merge resistors” who plan to continue the use of the PoW mechanism.

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Ethereum Ethereum Classic Tether

Key Miner Plans to Derail ETH’s Transition to Proof-of-Stake

The Ethereum Merge – the term used to describe Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) – is getting closer to realisation, possibly by mid-September.

However, according to one prominent figure in the Ethereum community, Chandler Guo, a new PoW version of ETH is “coming soon”.

Last week, Chinese crypto miner Guo tweeted about the advent of a PoW ETH, despite the already existing ETC (Ethereum Classic), which Guo was part of. He proclaimed: “I fork[ed] Ethereum once, I will fork it again!”

The plan is gaining traction on Crypto Twitter, though many in the Ethereum community remain confused and had mixed reactions. Some of them stated there was no need for a new PoW:

Huobi, Poloniex Back a Possible ETH Fork

It seems several high-profile players in the industry are supporting the idea of an ETH fork, including the Justin Sun-backed crypto exchange Poloniex, and Huobi.

Sun tweeted about his intention to donate over 1 million ETH if Guo carried out his plan, saying: “We are willing to continue to support the development of the community.”

Many users inquired about Tether’s (USDT) involvement regarding an ETH fork, with Tether CTO Paolo Ardoino clearly outlining Tether’s support for the Merge:

It’s not about what I/we prefer between PoW/PoS. Stablecoins should act responsibly and avoid disruption for users. Especially for DeFi, it’s really delicate.

Paolo Ardoino, CTO, Tether

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Bitfinex Crypto News Payments Social media Tether

Tether and Bitfinex Launch P2P Video Chat App ‘Keet’

Tether and Bitfinex have joined forces with software company Hypercore to launch a fully encrypted, peer-to-peer video chat application.

Keet is the first app to be built on Holepunch, a platform that allows developers to incorporate Web3 applications. It will initially only be available on desktop, though all three companies predict there will soon be a mobile app featuring “amazing” video quality:

Payment App Also in the Works

Holepunch, which is closed-source but expected to become open-source later this year, doesn’t run on a blockchain but uses the Lightning Network, a “second-layer solution” that speeds up Bitcoin transactions while reducing costs.

This would enable a payment app to be built on Holepunch, with the Tether stablecoin (USDT) supporting a default payment system. In late May, USDT was integrated into Polygon, enabling 19,000 decentralised applications (DApps) on the ecosystem to use it.

More Investment Dollars to Come

Tether, Bitfinex and Hypercore have already poured US$10 million into Holepunch, which could see tens more millions of dollars in further investments, they added.

The Keet app, like Holepunch, is free to use and is expected to be more private and secure than Web2 centralised peers such as Zoom or Google Meet. This is because Keet users can make calls directly to another individual’s computer, with nothing stored on a server.

As Holepunch CEO Mathias Buus has said, “This app is for everyone.”

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Ethereum Polygon Tether

Polygon (MATIC) Surges 70% Amid Announcement of New ETH Scaling Solution

Polygon (MATIC) has been one of the rare altcoins to experience recent exponential growth, now spurred on by the announcement of an Ethereum scaling and zero-knowledge (ZK) innovation – Polygon zkEVM, the first Ethereum Virtual Machine (EVM) zero knowledge layer 2 scaling solution:

Polygon to the Rescue

The team behind MATIC says it has made a major breakthrough in zero-knowledge proof technology that is fully compatible with the EVM. In the case of a zero-knowledge proof, one party is able to prove the veracity of a piece of information to another party without having to reveal the information itself.

This will allow developers to employ the ZK method for increased levels of security and data privacy:

According to Polygon, its new zkEVM will enhance the Ethereum experience for users and developers alike by adding efficiency and reducing costs while at the same time taking advantage of the leading smart contract platform’s existing secure and trusted framework.

The blog post said: “Polygon zkEVM is for everyone who wants a cheaper, faster way to use Ethereum without sacrificing security or decentralisation. It is permissionless – anyone can use it. It’s also open-source, meaning you can trust the code, rather than trusting us.”

MATIC Soars on Other Fronts

The Polygon network has been busy of late, which has contributed to its recent massive uptick in price. In May, Tether announced that USDT had been integrated into Polygon, meaning that more than 19,000 decentralised applications on the Polygon ecosystem would be able to use USDT.

MATIC’s price also skyrocketed as Disney picked Polygon for its Accelerator Program last month. The program will focus on augmented reality, artificial intelligence characters, and NFTs.

The implosion of Terra has also meant big things for MATIC after more than 48 projects originally built on the Terra blockchain began to migrate to Polygon in the wake of Terra’s sudden collapse in May.

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Crypto Exchange FTX Markets Terra Tether

FTX Founder ‘SBF’ Warns Some Crypto Exchanges Are ‘Already Insolvent’

One of the richest men in crypto, 30-year-old FTX founder and CEO Sam Bankman-Fried (also known as SBF), has warned that some “third-tier” crypto exchanges are already secretly insolvent.

Among his recent comments to Forbes, SBF declined to name which exchanges he believes are currently broke. However, his warning comes as the fallout from the May collapse of the Terra blockchain continues to wreak havoc across the crypto market, with the highly Terra LUNA-exposed Singapore-based venture capital firm Three Arrows Capital (3AC) recently announcing it’s nearing insolvency.

SBF Bails Out Struggling Firms

As a result of 3AC’s insolvency issues, fellow crypto-focused firms BlockFi and Voyager Capital – which had each given 3AC sizeable loans – also found themselves in treacherous financial waters. 

Fortunately for these firms, SBF swooped in, through his exchange FTX and trading firm Alameda Capital, to provide US$250 million in credit to prop them up and protect their customers’ funds.

Speaking to Forbes about the credit infusion SBF said, “ … You know, we’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilise things and protect customers.” 

Of course, stabilising the crypto market and seeing it grow is also very much in SBF’s interest – his US$20.5 billion fortune is closely tied to the performance of the crypto market.

It has also recently emerged that SBF may be looking to go beyond simply providing credit to BlockFi, with reports suggesting he is now in talks to acquire the New York-based firm.

SBF Expects to See Numerous Exchanges Fail

Despite his willingness to prop up some ailing crypto firms, SBF doesn’t anticipate this generosity being applied indiscriminately across the industry. Talking to Forbes, SBF said there were companies throughout the crypto industry that were beyond saving:

There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved. 

Sam Bankman-Fried, founder, FTX 

Tether Won’t Collapse

One much-maligned digital asset SBF has no fears for is crypto’s largest stablecoin, Tether (USDT). While many consider the collapse of the US$70 billion stablecoin is inevitable due to its reportedly less than ideal collateral situation, SBF claims there’s no reason to worry, saying: “I think that the really bearish views on Tether are wrong … I don’t think there is any evidence to support them.”

In other SBF news, the crypto magnate declared on a podcast last month that he was willing to donate up to US$1 billion to the US Democratic Party to keep Donald Trump from returning to the White House.

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Crypto News Stablecoins Tether

Tether to Launch Stablecoin Pegged to British Pound Sterling

Stablecoin issuer Tether is set to launch a stablecoin pegged to the British Pound Sterling in early July, using Ethereum as the first support blockchain.

According to a June 22 blog post from Tether, the GBPT will have a 1:1 ratio to the Pound Sterling and will provide a faster and less costly way of transferring assets:

UK ‘Next Frontier’ for Blockchain Innovation

Tether executives are reportedly working with UK regulators to prepare the next steps for rolling out the GBPT. Paolo Ardoino, CTO of Tether, cites the UK as the “next frontier” for blockchain innovation.

We believe that the UK is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets. We hope to help lead this innovation by providing cryptocurrency users worldwide with access to a GBP-denominated stablecoin issued by the largest stablecoin issuer,

Paolo Ardoino, CTO, Tether

Welcome to the Family

The GBPT joins the family of fiat currency-pegged stablecoins from the company, which also includes the recently launched MXNT, the Mexican Peso-pegged stablecoin.

On May 31, Tether announced that USDT had been integrated into Polygon, one of the largest Ethereum sidechains, providing more than 19,000 applications on the Polygon ecosystem with the ability to use USDT.

Tether is expanding its family of stablecoins at the same time that the company is denying claims that its commercial paper portfolio is mostly backed by Chinese commercial paper, the reason why a US$4 billion hedge fund has placed a short bet against Tether.

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Crypto News Polygon Tether

Tether’s USDT Launches on Polygon To Support 19,000 DApps

Tether recently announced that USDT has been integrated into Polygon, one of the largest Ethereum sidechains. This means that more than 19,000 decentralised applications (DApps) on the Polygon ecosystem will be able to use USDT.

According to a May 27 announcement by Tether, the addition of USDT to the Polygon ecosystem is a “milestone moment” for the company, as it will allow investors to use the stablecoin for transfers and generate yield.

We’re excited to launch USD₮ on Polygon, offering its community access to the most liquid, stable, and trusted stablecoin in the digital token space. The Polygon ecosystem has witnessed historical growth this year and we believe Tether will be essential in helping it continue to thrive.

Paolo Ardoino, CTO, Tether

The news comes shortly after Terra relaunched its blockchain and ditched its old UST token, which this month experienced one of the worst meltdowns in crypto history, raising concerns about the legitimacy of stablecoins worldwide.

Tether Also Launches Mexico Stablecoin MXNT

In other news, Tether has also pivoted into the Latin American market after launching a Mexican peso-pegged stablecoin, which will be initially available on Ethereum, Tron and Polygon.

The new stablecoin, dubbed MXNT, becomes the fourth stablecoin rolled out by Tether. Besides USDT, they are the Euro-pegged EURT and the Chinese Yuan-pegged CNHT.

So far, Tether has maintained its status as the leading stablecoin in the market. However, the company has not always been keen to open its reserves books. Tether periodically releases assurance opinions instead of full audits to disclose its reserves to the public, something that has raised suspicions within the crypto community.

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Crypto News Stablecoins Tether

$4 Billion Hedge Fund Makes a ‘Big Short’ Bet Against Tether

Fir Tree Capital Management has its sights firmly set on shorting the stablecoin Tether amid regulatory scrutiny and fears regarding ties with the Chinese debt market. The firm will hedge an asymmetric bet that will limit the downside but if it proves correct, will be enormously profitable:

New York-based Fir Tree has over US$4 billion under management and has structured its position on Tether (USDT) as an “asymmetric trade”, which means the downside risk is small and the potential payoff is large. The fund started to explore taking a short position on USDT in July 2021, reasoning that much of the token’s US$24 billion in commercial backing is tied to Chinese real-estate developers, which are currently struggling.

Therefore, if the paper loses value, it will lead to a potential big drop in Tether’s reserves and the coin’s price. Fir Tree had previously said that betting on this decision could generate profit within 12 months.

Chinese Real-Estate Market Facing Massive Debt Issues

The entire Chinese real-estate market is facing debt of its own, led by the China Evergrande Group, whose liabilities exceeded US$300 billion as of December 2021 when it missed a payment deadline. Tether, the company, has indicated that it does not own any commercial paper linked to Evergrande, but it has been reported that Fir Tree expects some of the commercial paper it does own to lose value.

Tether’s Reserves in Question

Many have queried of late whether Tether has enough cash reserves to back itself. The stablecoin’s quarterly assurance opinion published last month showed a decrease of 21 percent in commercial paper holdings over the past quarter.

In May last year, Tether released a breakdown of its reserves for the first time since 2014, which indicated that as of March 2021, the company held almost 76 percent of the its reserves in cash or cash equivalents. In this category, commercial paper comprised the majority, with 65 percent.

Tether has previously claimed it was 100 percent cash-backed, but the breakdown of the company’s reserves showed that less than 3 percent were actually held in cash. In October, Tether faced a US$41 million fine for lying about its reserves.

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Bitcoin Crypto News Events Tether

Swiss City of Lugano to Make BTC and USDT ‘De Facto’ Legal Tender

This week, Switzerland’s ninth-largest city, Lugano, played host to “Plan ₿”, where the city proudly announced plans to make both BTC and Tether (USDT) “de facto” legal tender.

Europe’s Aspiring Bitcoin Capital

In the livestreamed event, Mayor Michele Foletti and CTO of Tether, Paolo Ardoino, announced plans to make both bitcoin and USDT legal tender in Lugano, a city with just over 60,000 residents.

Once passed, residents will be able to make payment for public services, fees and taxes in bitcoin or USDT. Mayor Foletti described the move as a “de facto” legalisation, given that the the Swiss franc would remain as official legal tender in the city and elsewhere in Switzerland.

In addition to the proposed changes to legal tender laws, Plan ₿ also involves establishing a Bitcoin and blockchain hub, where entrepreneurs can congregate, collaborate, network and host Bitcoin meetups and workshops.

This [the Bitcoin hub] is probably the most important thing of this project.

Paolo Ardoino, CTO of Tether

A City Following in El Salvador’s Footsteps

Since El Salvador declared bitcoin legal tender, its GDP has increased by 10 percent and its tourism by 30 percent. “Imagine what we can do in a city at the centre of Europe,” Ardoino added, when speaking of El Salvador’s remarkable progress.

Foletti indicated that the city would “roll [out] the red carpet” for Bitcoin businesses, visitors and new arrivals, offering a business-friendly environment with minimal red tape. El Salvador has similarly taken this approach by creating an attractive investment environment, and exempting foreign investors from capital gains on the bitcoin.

There are a host of other exciting developments happening in Lugano, including a move towards bitcoin mining. To get fully up to speed with the city’s plans, an English translation of the event has been provided below:

As nation states and cities around the world compete for crypto talent, Lugano has put the world on notice that it is serious about becoming a crypto paradise.