- Tether, the biggest stablecoin in the industry backed by the US dollar is a token of controversy within the industry.
- Primarily, this is because of their claims about the digital asset being backed by dollars and the auditing attempts failing over the years.
Tether, the biggest stablecoin in the industry backed by the US dollar is a token of controversy within the industry. Primarily, this is because of their claims about the digital asset being backed by dollars and the auditing attempts failing over the years. For those that don’t know, The token will always maintain a 1:1 ratio with the US dollar, especially in terms of value.
Looking back into the history books to 2017, the company was allegedly hacked for around $31 million worth of its token and as a result of this, a system network upgrade was to be done in the form of a hard fork. Looking more recently, the biggest scandal that the company has been involved with was with Bitfinex as they were both accused of hiding a huge loss of $850 million after the platform allegedly took out a kind of loan.
But the stablecoin gave a statement essentially admitting to not being paid to the dollar at a 1:1 ratio as they said the following at the time:
“Every Tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.”
This has led to many people within the industry call out the project for being a scandal. Long-term investor, Peter Brandt took to Twitter recently to give his thoughts on the project, saying:
This will all collapse. You've been warned. pic.twitter.com/bEFLNcDqmn— Silver Watchdog (@Silver_Watchdog) August 10, 2020
Who knows what the future of Tether will hold. One thing is for sure though, many regulators will have their eye directed straight towards the project.