{"id":379833,"date":"2019-04-26T13:22:19","date_gmt":"2019-04-26T13:22:19","guid":{"rendered":"https:\/\/ktsl888.com\/?p=379833"},"modified":"2024-06-11T07:39:47","modified_gmt":"2024-06-11T07:39:47","slug":"crypto-analysts-divided-over-tether-debacle","status":"publish","type":"post","link":"https:\/\/ktsl888.com\/news\/crypto-analysts-divided-over-tether-debacle\/","title":{"rendered":"Crypto Divided Over Tether, Some “Unequivocally” Bullish On Bitcoin"},"content":{"rendered":"

What many thought would never happen did on Thursday. Just days after Tether Limited, the company behind the USDT stablecoin, minted $300 million<\/a> worth of its crypto asset, reports revealed that its operator, iFinex, may be on thin ice. It was claimed that prominent Bitcoin (BTC) exchange Bitfinex was unable to keep up with customer withdrawals in late-2018, leading to the exchange dipping into Tether’s pockets.<\/p>\n

Related Reading: Hacked Bitcoin Moves: 300 of Bitfinex Users\u2019 BTC Moves for the First Time<\/a><\/h6>\n

Some have seen this news as decidedly bearish for cryptocurrencies, but others are sure that this is just a flash in the pan. In other words, analysts are divided as normal.<\/p>\n

Crypto Exchange ‘Borrowed’ $625M From Tether<\/strong><\/h2>\n

For those who missed the memo, here’s a brief recap: On Thursday, the New York Attorney General’s (NYAG) office published a press release, in which it was stated that Bitfinex and Tether<\/a> were in violation of New York law through participation in activities that “may have defrauded” local cryptocurrency investors.<\/p>\n

Letitia James, the Attorney General herself, explained that the two firms may have “engaged in a cover-up” to hide the “apparent loss” of $850 million, which was a result of a payment processor, Crypto Capital, losing access to the funds (purported seizure by governments in Poland, Portugal, and the U.S.). It was explained in a 23-page document that sometime in the past six months, Tether transferred $625 million to Bitfinex. And just recently, Bitfinex is reported to have returned the funds, but still has an iFinex shares-backed line of credit, which amounts to $700 million, open with Tether.<\/p>\n

This means that all USDT is backed by assets that summate to the stablecoin’s market capitalization, but that the assets involved pose “considerable credit risk,” as analyst Alex Kr\u00fcger explained<\/a>. Kr\u00fcger claims that 75% of USDT’s aggregate value is cash-backed, while the latter is secured through shares in the cryptocurrency conglomerate, including its assets and receivables.<\/p>\n

As a result of this news, some have begun to fear the worse for not just the two aforementioned entities, but the broader cryptocurrency market too. As analysts have noted, Crypto Capital, which is really the whole weak link, is tied to QuadrigaCX<\/a>, the Canadian exchange that “lost” $150 million in Bitcoin and Ethereum, then bankrupted.<\/p>\n

While the payment firm hasn’t been convicted of wrongdoing, some say that this sets a bad precedent for Bitfinex, who now has a hole burning in its pocket. If Crypto Capital fails to recover the funds and if the NYAG’s office heavily fines Bitfinex, there’s a chance that the popular exchange won’t make it through. This is notable, as Bitwise’s data site, BitcoinTradeVolume, claims Bitfinex is the second largest spot market for BTC. The closure of Bitfinex could spell disaster for liquidity, and potentially set a precedent for respected authorities to go after other industry startups.<\/p>\n

\n

– Bitfinex & Tether have the same execs.
\n– Shady internal transactions
\n– OAG NY will rake both of them over the coals, potentially fines
\n– Bitfinex may not survive, Tether might<\/p>\n

\u2014 JP [ \u20bf \u26a1\ufe0f] (@jpthor__) April 25, 2019<\/a><\/p><\/blockquote>\n

Even if this case is somehow resolved peacefully, some are sure that crypto is now painted in a bad light. As analyst Nebraskan Gooner quipped, this news is “how [you would] scare institutional investors away from crypto.”<\/p>\n

\n

…. how to scare institutional investors away from crypto in – <\/p>\n

3…
2…
1…<\/p>\n

— Nebraskangooner (@Nebraskangooner) April 25, 2019<\/a><\/p><\/blockquote>\n