Tether Scrutiny: Will It Be the Next LUNA and FTT?

November 20, 2022 at 01:08 PM GST updated: November 22, 2022 at 11:45 PM 2 mins read Altcoin News

Tether has failed to release its backing documents.
The stablecoin`s failure would bring a great sell-off in cryptocurrency.
Binance earlier temporarily paused deposits for USDT and USD coins

Tether, the largest stablecoin at the moment, has drawn rumors since it hasn’t made its supporting documentation public. This comes after numerous opinions from the cryptocurrency world that the USDT cryptocurrency pair would crash next due to its incompetence in creating its “secret sauce.”

This is allegedly the same scam that Madoff, Theranos, Enron, and other SEC crooks used.

I worked in the SEC Enforcement Division for 18+ yrs. It’s déjà vu all over again. No one knows the true nature of Tether’s backing. Tether's axiom: “We don’t want to share our secret sauce." Wasn’t that the same grift sung by Madoff/Theranos/Enron/Countless other SEC criminals?
— John Reed Stark (@JohnReedStark) November 17, 2022

Tether hasn’t yet offered any proof that their stablecoin is backed by US dollars, and this is problematic, according to Twitter user Cryptolunatix. If Tether, a suspected Ponzi scheme, fails, it would undoubtedly drag everything down with it and trigger a significant sell-off in cryptocurrencies.

However, the fact that the bankrupt company Alameda heavily utilized Tether as a stablecoin supports these reports.

Tether is the 60 billion pound elephant in the room of this crypto crash.

It still can get much worse. Don't forget Alameda Research was the biggest user of Tether.
— Coffeezilla (@coffeebreak_YT) November 17, 2022

It is remarkable that the market capitalization of Tether has never fallen. Given the unrest in the cryptocurrency market, one may anticipate a surge in Tether’s market cap as crypto sellers stash their money there. This is in contrast to prior events, even though it appears to be a Tether run.

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It’s also important to recall a moment when Paolo, the CTO of Tether, was questioned about how Tether maintains its $1 peg. He answered with a string of incomprehensible phrases. Being Italian, he feigned not to comprehend. This also reveals warning signs that have been there in Tether for a long time.

Remember that time when Paolo was asked about how Tether keeps its $1 peg and he responded with a bunch of words that didn't make sense, and then he pretended not to understand because he's Italian?

The red flags have been there all the time. pic.twitter.com/iEn9fJEFM5
— dan.mx (@danny_mx) November 14, 2022

Other recent reports state that on 17th November, Binance provided an update. Deposits for USD Coin and Tether tokens “have been temporarily halted until further notice,” according to the statement. As of the time of publication, both tokens were still pegged to the US dollar. A statement from Binance was requested by Insider, but there was no immediate response.

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