The co-founder of Ethereum turned founder of ConsenSys, Joe Lubin has given his views on the recent fiasco between Tether and the Bitfinex exchange.
Even though it occurred a few months ago now, Lubin appeared at the recent Fluidity Summit conference where he said, “it seems like a really big mess that probably won’t get better.” Lubin is referring to is the New York State Attorney General that claimed Bitfinex lost $850 million and subsequently used funds from affiliated company Tether to cover the damage.
As reported by Ethereum World News:
“The issue is that Tether has had a shadow of controversy following it for some time, and this allegation hit not only the stablecoin, but also Bitfinex, and the rest of the cryptocurrency space which has now been piled with more bad press.”
The good and the bad
So even though the allegations being targeted against Bitfinex haven’t had much impact on the market - especially given that Bitcoin reached the $10k mark earlier this week - it still isn’t nice to have going on in the background.
On top of this, Lubin also mentioned how this big blow to Tether could benefit on other stablecoins which have emerged more recently.
“There are other price-stable tokens out there — many others — and I think they’re going to gain traction because of this. I think that will be a really good thing.”
Looking to the Future
As apart of Tether’s controversy was that the firm maintained until only recently that it was 100 percent backed by the US dollar. Even so, it has been found to not be true. Lawyers confirmed that Tether only had enough cash to back quarters of its increasing supply.
Lubin states that this whole situation with the exchange and leading stablecoin isn’t going to get any better any time soon.
In fact, there’s always the chance that Tether could collapse under the pressure, so to speak. Exchanges are a big topic in the crypto space, no doubt about it but the topics are usually coupled with that of hacks, scams, illicit dealings and so on.
We’ll end on a high note in that while this whole fiasco has been ongoing, the market hasn’t been affected by it. Considering that they are both massive crypto companies, the fact we haven’t seen anything that negative occur price wise is a good sign for the future!