Tether prints $1 billion ‘unbacked’ USDT ‘out of thin air’

Tether minted another $1 billion worth of USDT on April 16, as the cryptocurrency market accumulated significant losses. The billionaire issuance raised criticisms and questions about its legitimacy, while Tether’s CEO disclosed the issuance as “inventory replenishment.”

In particular, WhaleWire called Tether out a few minutes after the mint occurred through a post on X (formerly Twitter).

“JUST IN: Another $1,000,000,000 worth of unbacked Tether USDT has been printed out of thin air.”

– WhaleWire

Picks for you

Interest in ‘Bitcoin halving’ on Google hits highest ever 15 mins ago
Buy signal for two oversold cryptocurrencies amid Iran-Israel escalation 2 hours ago
What’s happening with the dollar as USD skyrockets to a 5-month high? 3 hours ago
DOGE trades near crucial support; Crypto expert eyes major ‘buy’ opportunity 3 hours ago
“$1 billion USDT” post. Source: X/WhaleWire

Notably, Tether minted the $1 billion USDT through a smart contract on the Tron Network (TRX). The issuer sent the tokens to the Tether Treasury account labeled by TronScan. As of writing, the account holds $1.19 billion in its stablecoin.

Tether $1 billion USDT inventory replenishment

However, Paolo Ardoino, Tether’s CEO, made a public service announcement on X right after the mint. On that announcement, the CEO disclosed this activity as “inventory replenish,” while explaining this was “authorized but not issued transaction.”

According to Tether’s website, this means that the company reserves do not yet back this amount, explaining WhaleWire‘s “unbacked” criticism.

“Tether tokens (USD₮) that are “authorised but not issued” are tokens that are created on a blockchain and sitting in Tether’s treasury. As these tokens have not been issued, these tokens are not counted as part of the total market capitalization of USD₮.

“Issued” USD₮ are authorised tokens that have been sold and issued to Tether’s customers and in actual circulation. “Issued” USD₮ are fully backed by Tether’s reserves.”

– Tether’s FAQ
Frequently Asked Questions (FAQ). Source: Tether

Tether’s ability to easily create billions of dollars worth of unbacked tokens with a few lines of code has raised many controversies around the company. Interestingly, BlackRock (NYSE: BLK) mentioned significant risks related to the crypto market’s high exposure to USDT on its ETF filings.

Furthermore, Circle, the USDC issuer, in partnership with Coinbase, publicly encouraged the U.S. Congress to “go after” Tether.

As a result, these minting activities and the lack of further disclosure on burns and issuance sums up the uncertainties surrounding the company and the stablecoin responsible for the vast majority of cryptocurrencies‘ liquidity in exchanges.

Comments

Post a Comment

Popular posts from this blog

Both LUNC And USTC Defy Expectations In Remarkable Comeback

Image
Both LUNC and USTC have shown signs of recovery after their prices plummeted on December 5. LUNC and USTC saw their prices rise over the past day despite the global cryptocurrency market cap dropping by 3%. The ongoing LUNC burns and the new proposal concerning USTC minting could be behind the tokens’ recovery. Since December 5, both Terra Classic (LUNC) and TerraClassicUSD (USTC) experienced significant price declines. As a result, many in the industry were left wondering if the end has come for the Terra Classic cryptocurrency duo. However, heading into the new week, both cryptocurrencies were able to make a comeback. At press time, USTC was trading hands at $0.04247 after its price was able to rise by 1.36% throughout the past 24 hours. The token’s 24-hour trading volume also ended up surging by more than 280%, which left it settling at around $264,444,330. With regards to LUNC’s performance, CoinMarketCap indicated that the altcoin saw its price dip b
Read more

Bittrex’s Bankruptcy Filing Approved By US Courts

Judge Brendan Shannon has approved the liquidation of Bittrex exchange. The approval would allow Bittrex to carry out plans for winding down its U.S. operations. Bittrex’s U.S. arm filed for Chapter 11 bankruptcy protection in May 2023. Judge Brendan Shannon  approved the liquidation of crypto exchange Bittrex at a hearing in Delaware on Monday, October 30, permitting the company to proceed with its bankruptcy plans. The approval would allow Bittrex to carry out plans for winding down its U.S. operations.  According to the reports, the Securities and Exchange Commission (SEC) accused Bittrex’s American subsidiary of operating an unregistered exchange, and the company filed for Chapter 11 bankruptcy protection in May.  Following the development, the company settled with the SEC for $24 million in August. Details of the report showed that Bittrex filed for the Order on October 26, 2023. The crypto exchange subsequently revised the filing on October 27
Read more

Zilliqa jumps 5% amid Google Cloud ‘strategic alliance’

Image
Google Cloud joins the Zilliqa (ZIL) network as a staked seed node operator to scale the blockchain’s resilience and data availability. Google’s cloud provider, Google Cloud, is expanding the list of supported blockchain networks by signing a multi-year strategic alliance with Zilliqa, a layer-1 blockchain. In a blog post on Sept. 13, Zilliqa said that Google Cloud would serve as a staked seed node operator (SSN) on its network, joining 28 SSN operators, including Binance Staking, Wave, KuCoin, and others. The cloud giant will provide node infrastructure for its customers and help validate transactions across the network, Zilliqa says. You might also like: Fireblocks integrates Google Cloud and others for enhanced blockchain security Zilliqa Group, in its turn, will use Google Cloud’s infrastructure to improve resilience and data availability, the statement says. For instance, Zilliqa says it will use BigQuery, Google Cloud’s serverless data warehouse, to make its block
Read more