MANY QUESTIONS ARISING ABOUT CRYPTOCOIN TETHER AND BITFINEX

Tether Holdings issues more and more tethers; suspicions about the relationship of the exchange Bitfinex and the cryptocoin tether continue to increase

As tethers are pegged to the US dollar they were spared the recent cryptocoin downturn

As a recent Digital Journal article explains, as the tether(USDT) is pegged to the US dollar and also said to be backed by holdings of one US dollar for each tether its price was only minimally effected by the cryptocoin meltdown. Indeed many probably traded for tethers to use as a stable store of value equal to the US dollar and the price of tether increased slightly.

Hundred of millions of new tethers are being issued
There are growing suspicions that tether is not backed by one US dollar for each tether. These suspicions are increasing as the number of tethers in circulation has vastly increased with no new audits published.
According @TetherPrinter a Twitter account tracking the issuance of tether, $400 million US dollars worth of tethers has been issued in just the last four days.
The Paradise papers leaked to the public in 2017, have shown that Tether and Bitfinex are essentially sister companies with overlapping ownership.
Unlike some cryptocoins that have just so many coins already issued or those such as bitcoin that must be mined, tethers are simply issued by Tether Holdings just as a central bank would do. However, the tethers are not backed by a government and laws that make it legal tender. However, it is claimed that each tether is backed by a US dollar.
The problem is that there is no proof of this as there has been no published audit, just a memo for internal use. The last audit of tether was in March 2017. This showed a discrepancy of nearly a million dollars between Tether's US dollar holdings and the amount of tethers (USDT) in circulation.

A recent tweet by a critic of Tether Bitnexed says: "Two billion Tethers, an increase of 1 Billion or so since December. Zero audits.Imagine how bad crypto-crash would have been without them doubling their counterfeiting." Many critics think that the market is being manipulated, as every time a large number of tethers are issued money pours into bitcoin pumping up its price.

Credit to Ken Hanley - source: www.digitaljournal.com

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