Tether is a stablecoin pegged 1-to-1 to the US dollar and used as a digital dollar to facilitate transactions between cryptocurrencies. The coin was created by Reeve Collins, Craig Sellars, and the 2020 US presidential election candidate Brock Pierce, who called it a successful experiment of putting fiat currency on a blockchain. Tether claims that it issues new coins in response to need, but critics argue that the token is used in an elaborate scam to buy and ramp up the price of Bitcoin. In a 2018 study, researchers from the University of Texas concluded that Tether appears to have been used to stabilize and manipulate the price of Bitcoin, but Bitfinex executives deny the claims. In a new interview with What Bitcoin Did host Peter McCormack, Bitfinex CTO Paolo Ardoino and general counsel Stuart Hoegner again pushed back on the allegations. They acknowledged that the flagship cryptocurrency is among the reserve assets that Bitfinex uses to back USDT. Still, they dismissed the idea that Tether is issued only to buy Bitcoin. Ardoino reasoned that Bitfinex can use the fiat money it has to buy BTC.
Transparency issues
Hoegner also claims that the stablecoin is fully backed by assets that include cash, cash equivalents, and BTC amid reports that only 74 percent of USDT is backed. Ardoino and Hoegner refused to reveal the exact makeup of Bitfinex’s reserve assets, though. As to why Bitfinex is not hiring outside auditors to conduct a full audit, Hoegner justified this with consulting reports from an accounting firm and a law firm, and a report from Btifinex bankers. Listen to the full interview below:
