Using Tether USDT as alternate to US Dollar for Trading? - Think Again !!!

As most of us are already aware about Bitfinex getting hacked last year in August, total fund lost was about $72 million, Although hack was targeted on some random wallets on BitFinex and emptied them completely. Which technically means some of the customers lost everything and rest of them were left unaffected.

But BitFinex decided to made a move towards a controversial decision to reduce everyone's account balance by 36% including US Dollar holdings to spread the losses equally to all it's customers, which made many people angry and let's face it, if you're not hacked and exchange takes your money to cover the losses you'll be pissed off too.

To make all their customers safe and to compensate them BitFinex issued BFX tokens which was created by BitFinex itself which were technically bonds with ZERO legal obligations (sounds drastic isn't it?). They enabled customers to trade BFX tokens on the exchange and as you can imagine they traded for pennies on the Dollar (LOLzzz...).

Eventually BitFinex reclaimed all of the BFX tokens at par value or for One US Dollar each. One observer who goes by the name of BitCrypto'ed noticed an interesting co-relation between crypto currency called Tether and the payment of BFX tokens, He even ponied it out that as BFX tokens were paid of the number of Tether issued was drastically increased, in short tether is a cryptocurrency where investors are able to deposit USD in exchange of tokens that are backed by each USD dollar behind every token which means it's always being valued as 1 tether as 1 USD.

Currently we see almost every exchange is using USDT or tether as a alternate to US Dollar due to the complications of current laws with which they cannot accept USD Deposits straightly. BitFinex is the major share holder of tether and also the company behind tether.

Now according to Crypto'ed, as investors gave US Dollars to tether holdings in exchange for tether, instead of placing that money in reserves what they should do, they funneled them through the BitFinex platform, BitFinex now took those funds and used them to pay off the BFX tokens.

It surely sounds like a conspiracy theory but aspects of it are actually true, I'm sure if you try to google about this you'd get lot more info than what i have tried provide here. for example tether holdings recently released it's audits and they stopped at March 31st, this is conveniently three days before BitFinex made the announcement that they would be paying off for all remaining BFX tokens, Also both companies flied a law suit against Wells Fargo after the bank decided to suspend international wire transfers to the Taiwanese banks they both use.

BitFinex began to refuse US Dollar deposits and withdrawals resulting in a premium for Bitcoin on the exchange (seems almost familiar what happened to MTGox back in 2013).

To respond to these events tether holdings informed everyone that international wire transfers would be denied until they solve their money transfer problems. Tether holdings announced, they did not anticipate the amount of tether issued to increase significantly.

Since this announcement, the number of tether tokens has increased nearly ten fold from 55 million all the way upto 400+ million. however tether tried to justify this in their latest update claiming that their institutional clients were setting up banking locally and therefore were responsible for the issuance of increased tether tokens.

All this is highly suspicious to me. what you guys think of tether, please let me know in the comments below.

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