- A Medium piece that accused Tether of pumping the Bitcoin price has been criticized by several high-profile crypto figures
- The piece made the same arguments that Tether is illegitimately issuing billions of USDT tokens
- The arguments were countered by a number of individuals in an interesting show of solidarity
Tether’s legitimacy has been defended by a number of popular crypto Twitter individuals in the wake of a lengthy critique from an anonymous source. The critique, which repeats the same arguments made many times in the past and is apparently the reason why the author sold his Bitcoin at a 600% profit earlier this month, seems to have attracted the ire of the cryptocurrency community, some of whom attacked the arguments made in the piece and the evidence used to make them.
Tether FUD Rumbles On
There have always been questions over the legitimacy of Tether’s USDT printing, most of which started in earnest during the 2017 bull run. Reports since then have focused on USDT printing and consequential bitcoin buying as the explanation for it hitting $20,000 in 2017, and those accusations have continued to this day, where Tether’s market cap sits at $24.4 billion compared to $1.3 billion at the peak of the 2017 bull run. A recent podcast appearance by Bitfinex counsel Stuart Hoegner failed to convince many of Tether’s critics that it was a legally sound operation.
The Tether FUD picked up pace over the weekend however when an anonymous piece published to Medium repeated the same allegations following an amateur investigation into Tether’s issuance. The author claims to have flown into a panic when he began reading about the lack of clarity from Tether over how their assets are backed, the flow of minted USDT to exchanges, the Bitfinex/Tether lawsuit and more. His mind also seemed to explode when he learned about the concept of margin trading, which was an odd departure from the thrust of the piece.
Crypto Twitter to the Rescue (Sort Of)
Crypto Twitter seems to have had enough of the Tether FUD however, with some prominent voices in the space arguing that times have changed since 2017. One former critic, The Block analyst Larry Cermak, said that “so much of the Tether criticism is just lazily jumping to conclusions these days” adding that “most of the concerns I’ve had have been addressed either publicly or privately.”
Nickel Digital Asset Management manager David Fauchier seemed to concur, saying that “most of the conclusions here show zero understanding of crypto market structure” adding that “the idea that the market is being propped up by USDT being paid out to promoters is daft.” However, he, like many, stated his belief that it was “inexcusable” that Tether still has not had a full, independent audit.
Alex Krüger compiled a handy “anti-tether FUD toolkit”, saying that “Won’t debunk the conspiracy theory every time someone new writes rehashes it”, pointing instead to a number of resources that address the concerns of Tether critics. He did however take time to acknowledge that the author’s “argument is unsound and shows very poor understanding of crypto and markets.”
Audit, Audit, Audit
While many of the arguments put forward by the crypto crowd are sound, it can’t be denied that the Tether FUD could all be put to bed with an audit, but for some reason they seem unwilling or unable to do so. Until they do however, the space will have to exist with this sword of Damocles over its head.