Introduction of Tether
Launched in 2014, Tether; It is a blockchain-based cryptocurrency supported by traditional fiat currencies such as Dollar, Euro and Yuan, and its symbol is USDT.
The project recently launched TetherGold, which is gold-backed and corresponds to 1-ounce gold.
We know the USD, and T is the token's equivalent.
Tether is a token that is "tried to be fixed" for 1 American dollar.
“Why was such a thing needed? Wasn't the purpose to buy cryptocurrencies and earn high profits? ” questions may come, let me answer this as follows:
Cryptocurrencies display very volatile movements in terms of price. Volatility means fluctuation. Bitcoin's drop from $ 20,000 to $ 3,000 levels is one of the most obvious and unfortunately the most painful examples of this fluctuation. Of course, not only in Bitcoin, but almost all cryptocurrencies have huge volatility.
At this point, Tether comes into play. The starting point of the project is not to be affected by these fluctuations. Not only that. You can transfer money anytime, anywhere in the world. You can think of Tether as the digital form of the American dollar. In this sense, it is a very useful product.
Versions of Tether
Omni and ERC-20 options may appear when you transfer tether. This is a confusing situation.
Tether was previously in the Omni layer on Bitcoin. But especially the slowness of the network caused Tether transfers to take longer. Later, most exchanges started using the ERC-20 Tether produced on Ethereum. The third and fourth options are EOS and Tron networks. Choose which one of the wallets you will send from Tether supports and trade.
Questions on Tether and potential risks
Major risk for holding Tether is an ongoing lawsuit on courts. As far as I know, totally 11 lawsuits filed against Tether and together with Bitfinex.
Here is the link of my previous articles about this.
https://www.publish0x.com/snowundersun/april-28-bitfinex-tether-vs-newyork-xxmzvx
https://www.publish0x.com/snowundersun/lawsuit-against-tether-xdrrjek
Here is the copy of this for further read.
have a legal case against Tether / Bitfinex and Bitfinex's sister company Ifinex and Crypto Capital ( and Crypto Capital's owner Global Trading LLC and Reggie Fowler, owner of Global Trading LLC ) in Southern district New York of U.S court.
When the lawsuit opened, there were 4 billion supplies, and there were approx. 800 million deficit/missing. The case opened up to this.
In 2020, they minted an additional approximately 3 billion USDT.
The defense of the tether / bitfinex cartel; The assets are not actually lost, they gave them to the crypto capital company through the Bitfinex's subsidiary Ifinex. They said that they made these transfers through the American banks in Arizona, Georgia, and Colorado, and they requested that these banks be subpoena to witness that they were transferred from tether / bitfinex to ifinex and then to crypto capital last month.
Crypto capital's $ 218 million in Portuguese banks and $ 335 million in Polish banks were seized from the "laundering money for Colombian drug cartel".
The source of this confiscated money is not clear whether tether / bitfinex or any other source (Colombian drug cartel).
Even if all of these coins are owned by tether / bitfinex, I couldn't find any explanation for the rest of the 800 million. I have read that Crypto capital's cases in Europe are not just tether / bitfinex, which is the incoming and outgoing money in different countries.
Crypto Capital is owned by a company called Global Trading Solution and the Global Trading's owner is Reggie Fowler. This fowler is included in the case with the charge of bank fraud, unlicensed money remittance business, etc. from tether related transactions.
The prosecution wants to convince fowler to deal with the court and have the tether / bitfinex sentenced. Fowler & Tether related case link to those who want to read the tether related indictment;
https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=PGPA0A4fPa9gWHml/J5wEQ==
In the draft, which the prosecution did not convert to the accusation, the financial records were not properly kept for tether / bitfinex in contradiction with the sarbanes-oxley law and the equal assets/equities that were not backed up %100 during the minting of the USDT as a contrary to the blue sky laws and the securities act dated 1933 and 1934 but were subsequently replaced by fowler. If not, maybe the prosecutor's office may issue additional indictments.
Tether's lawyers were sent an affidavit to the court on April 30, 2020, saying that there is no one-to-one correspondence, but 74% is worth the dollar and other commercial assets. In a way, they formally accept that Tether is not exactly back up %100.
https://www.coindesk.com/tether-lawyer-confirms-stablecoin-74-percent-backed-by-cash-and-equivalents
The link to those who want to read subpoena and other topics:
https://www.coindesk.com/bitfinex-tether-seek-subpoenas-across-us-in-hunt-for-missing-800m
Scheduled trial for Tether/Bitfinex was on April 28 but all court operations suspended in Southern District New York on March 30 because of Covid19. New trial date will be set after covid.
If case will resulted as Tether & Bitfinex will found quilty for fraud, unlicensed money remittance, laundering of drug cartel money , it may effect badly Tether value and can also effect entire crypto currencies in a domino effect.
Maybe it is low possibility but benefit to keep this possibility on mind.