A breaking news has stirred the crypocurrency market, and Bitcoin price has dropped by 300USD early this morning according to the data shown in CoinAll exchange.
Bitfinex covers $850 Million loss with Tether Funds?
According to the announcement published on NewYork Attorney General on April 25, it is clearly stated that crypto exchange Bitfinex has lost $850 million and subsequently used funds from Tether which is the company for stable coin USDT to secretly cover this deficit. Obviously, the market has great reaction to this news.
Again, USDT has the same issues about trust and transparency. Even though Tether has mentioned many times that USDT is pegged with USD, and every USDT issuance is based on the USD deposit. However, this is not the first time people found USDT issuance doesn’t follow this principle. Previously, Tether also faced controversy that they have issued more tokens than they had backing for, and sent them to Bitfinex cryptocurrency exchange. Following a subpoena from U.S. regulators, Tether and Bitfinex ordered an unofficial audit and it was found that USDT had the appropriate amount of backing dollars.
As respond to NewYork Attorney General, Bitfinex also published an announcement that they have never lost any fund, and everything goes quite well. However, this paper doesn’t include any detailed information such as audit report to prove it. Right now, both of NY Attorney General and Bitfinex have their own explanation, and there could be more information released soon to see how the situation will be.
Actually, no matter whether it is true or not, the investors have got worried about the stable value of USDT, which could be reflected from the stable coin price versus USD. As it is shown in the table below, USDT value decreases while other stable coins increase by certain percentage. It is easy to understand investors are trying to avoid the risk by exchanging USDT to other stable coins.
Who will be the next stable coin?
Although USDT still has domination in the stable coin market, it looks like time bomb for the crypto industry. A transparent, secured and reliable stable coin is indispensable for the future blockchain industry since it will work as the bridge between external fund and crypto world. If the bridge itself is not that stable, how we can make the industry grow substantially?
One Month ago, OK Group announced partnership with Prime Trust and will launch its own stable coin called OKUSD which is expected to operate on its own blockchain OKChain in the future. Prime Trust is a U.S.-based blockchain-driven trust company, providing custody, trust, fund processing and anti-money laundering compliance. With the help of Prime Trust, OKUSD will at least have the necessary requirements about transparency and security. In addition, since OK Group has cryptocurrency exchange OKEx, it will also provide liquidity for the stable coin. Nevertheless, the stable coin market has great competition, and it is beneficial for normal investors to hedge their risks.
How do you think about the market situation? And the future stable coins? Welcome to share with us!
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