The USDT chips are now fully protected by Tether reserves, the Stablecoin issuer announced on Thursday.
Tether published a response to what he called "imperfect paper" written by John Griffin, a professor of finance at the University of Texas at Austin, and Amin Shams, a professor at Ohio State University, who claimed a only address when exchanging Bitfinex. was responsible for manipulating the bitcoin market at the end of 2017, causing the bull market. The document was an update of a version published for the first time in the summer of 2018.
Tether rejected this assertion, saying in Thursday's statement that "the revised document is an embarrassing and embarrassing return" from the first version.
The statement that "all Tether tokens are fully protected by reserves" is perhaps more intriguing.
Whether or not the USDT is fully supported has long been a matter of contention. The company has promised an audit of its stable reserves (although it has not provided any, and has since dissolved its relations with its auditor), produced a third report indicating that it was likely to have more funds than outstanding tokens, and had a bank letter attesting to his assets. (The last two reports both acted as snapshots, only assuring the cryptography community that on certain days, Tether's obligations did not exceed its assets.)
Tether's support is even being investigated by the New York State Attorney General's Office.
Nevertheless, Tether maintained that his chips were fully guaranteed until April 2019, when General Counsel Stuart Hoegner wrote in an affidavit stating that the USDT was backed by "cash and cash equivalents". approximately 74% of the bonds currently in circulation.
At the time, Tether had $ 2.1 billion in assets, including $ 2.8 billion in USDT chips issued on the Omni blockchain. According to an explorer of blocks, this number would have fallen to 1.775 billion dollars since. However, an additional $ 2 billion is in circulation as an ERC-20 token
Tether's Transparency page indicates that the company currently has total assets of more than $ 4.6 billion, of which $ 4.56 billion US, $ 44 million US and $ 3.3 million Canadian Renminbi (the amounts are converted).
In an email to CoinDesk, Hoegner said the pending chips are currently backed by reserves, adding:
He declined to detail the breakdown between Tether's actual cash balances and cash equivalents, stating that "we do not generally share the composition of the asset".
& # 39; Lack of understanding & # 39;
Regarding the document that Griffin and Shams hope to see published in the Journal of Finance, Tether's statement Thursday states that "the authors demonstrate a fundamental lack of understanding of the cryptocurrency market and the demand that drives purchases of Tether chips ".
The newspaper itself said that its analysis "for the biggest Bitfinex actor" "revealed that" the 1%, 5% and 10% of the hours with this player's highest delayed Tether flow are associated with 55%, 67.2% and 79.2 percent increase in bitcoin prices compared to the period sampled from March 1, 2017 to March 31, 2018. "
The paper continued saying:
"This scheme is not present for streams to other Tether exchanges, and simulations show that it is very unlikely that these patterns are due to chance." This large player or entity has either presented a clairvoyant market timing, or exerted on the bitcoin an extremely important impact on prices that is not observed in the overall flows of other smaller traders. "
However, the paper suffers from incomplete data, including insufficient data on capital flows or timing of transactions, said Tether. As a result, the document can not "establish a valid sequence of events" for the claimed manipulation.
"In addition, the authors now admit that the trading patterns they observed could be consistent with the purchase on the Tethers market, as opposed to the issuance of non-backed Tethers. It is important to note that the authors do not possess or refer to any data indicating that Tether has sufficient reserves to safeguard the issuing of Tether chips in circulation, "the statement said.
The paper notes that "some members of the blogosphere and the press" have expressed doubts about the fact that Tether is totally secure, but adds that "cryptocurrency exchanges largely reject these concerns". However, his style and results "are more generally compatible with Tether being bottomless and put on the market".
The paper sparked skepticism and criticism from the crypto industry, with Tender skeptic Bennett Tomlin calling it "inconclusive".
Image of the Tether logo via Shutterstock