Tether (USDT) the tenth largest cryptocurrency according to CoinMarketCap, has an excess of dollars in its bank accounts that exceeds the USDT outstanding as of June 1, 2018, confirming that the currency is fully backed.
This crypto has been repeatedly in controversy, as its name came to light, along with Bitfinex, in a report that claimed that the USDT was used to manipulate Bitcoin prices in December 2017, which led to the rise of Bitcoin above US $ 20,000.
Tether Limited had hired the former FBI director, Louis Freeh Private Law, a research firm, Freeh Sporkin & Sullivan LLP (FSS) to regain community trust and also to assure investors that their cryptocurrency is backed by US dollars. USA
As the controversy over BTC price manipulation mounted, Tether was affected by rumors that reserve dollars were not really there.
FSS selected June 1 as the day to do the audit without Tether's knowledge. Online access was granted to Tether's bank accounts, account statements and employees at financial institutions. The official report stated that:
In accordance with the terms of engagement and the discretion provided by Tether, FSS selected the date of June 1, 2018 and received the following confirmations from the respective banks through affidavits and notarized statements provided by duly authorized personnel.
Bank 1: US $ 1,968,538,584.82 USD, Bank 2: US $ 576,528,652.00, for a total of US $ 2,545,067,236.82.
The report also noted that, according to Tether's transparency website, the total amount of USDT outstanding as of June 1, 2018 was equivalent to US $ 2,538,090,823.52. This meant that the company had a cushion of around US $ 7 million in excess.
Although the report was in favor of Tether, the community took it controversially. Skeptics questioned the full legitimacy and transparency of the report, even though the FSS stated that they had not given any prior notice to the company regarding its investigation date.
Concerns about Tether came to light when Bitfinex and Tether entered into deep controversies associated with the manipulation of Bitcoin prices. Two researchers from the University of Texas, John M. Griffin and Amin Shams, said Bitcoin prices were artificially inflated in December when digital gold reached its all-time high of almost $ 20,000.
Griffin, who is known to detect fraud in financial markets, reveals several different patterns in the trade suggesting that several people or one person in the main cryptocurrency market inflated the prices of virtual currencies.
The 66-page report, titled "Does Bitcoin have anything to do with Tether? "It stated that Bitfinex could have used the virtual Tether currency to generate a false Bitcoin demand by buying the virtual currency and holding its price while it sank into other exchanges.
The document revealed that, the more Tether entered the market, the higher the prices of the cryptocurrency, something "similar to the inflationary effect of printing extra money".