This is how Tether is manipulating the market by printing more money! In this article, we will go through the whole Tether fraud scheme.
What or who is Tether?
Tether is a crypto token made by Tether Limited which is controlled by Bitfinex. “Tether represents to users that any holder of tethers can redeem them from Tether the company at the rate of one tether for one U.S. dollar” — Letitia James. In a nutshell, it’s a stable coin that value should stay the same as the USD price. Most of traders use their currency “USDT” to trade cryptos as you probably use too!
So what is this whole manipulation scheme?
So first of all I’ll try to explain shortly as I can this whole thing as I know no one cares to read thousands of pages about it. So what Tether is doing is that they’re printing more Tether and dumping it to Bitcoin which causes Bitcoin price to go up, we can see proof of that by comparing Tether printing dates to the Bitcoin chart.
As we can see here Tether has a huge impact on Bitcoin’s price and as their insiders know when they’re printing they probably are buying just before it they start printing. Another problem with Tether has been unbacked coins which means that some of the coins used for trading and market manipulation aren’t actually worth 1$ even though Tether said this in their Twitter page:
OAG’s investigation found out that this wasn’t true.
The OAG’s investigation found that, starting no later than mid-2017, Tether had no access to banking, anywhere in the world, and so for periods of time held no reserves to back tethers in circulation at the rate of one dollar for every tether.
As of March 31st, only about 76 percent of Tether was backed by cash and cash equivalents, including unspecified commercial paper, which is a kind of short-term debt issued by companies. most of the rest of it is commercial paper, which represents about half of Tether’s collateral, or about 30 billion.
But isn’t Tether still worth a dollar?
Well more or less yes… Most people who own Tether bought it from someone else, and they’re probably not going to try to redeem it. They’re just more than likely going to sell it instead.
Tether has been in trouble before.
There have been quite many investigations about Tether by different countries and agencies so far about fraudulent actions. Tether Settles a $1 Trillion Lawsuit Regarding Manipulation! The plaintiffs who presented the case to the court said that the accused were deceptive, market manipulative, and anti-competitive. As a result, they claimed to have lost money. In over five years, Tether issued unbacked USDT tokens. Bitfinex would later purchase cryptocurrencies on the open market to increase the price during market plunges. According to the complaint, this caused the total market capitalization of cryptocurrencies to skyrocket to $795 billion in late 2017.
In 2019, New York state Attorney General Letitia James said they were investigating Bitfinex. Tether also came into the spotlight because of the exchange’s affiliation with it. The case revolved around the alleged $850 million cover-ups for a loss. It was around this time that the Tether lawyer admitted that Tether was only 74% backed.
Are there any safe stablecoins?
Many exchanges and tech companies have their own stablecoin, for example, Binance made BUSD which is worth 1 USD. I’ve heard that there’s a company making an stablecoin based on crypto market value and it’d print more coins only when the market goes up and burn coins when it goes down which would be the ultimate stablecoins we can have.
