Late this afternoon/evening Tether issued a statement in an attempt to calm the market reaction connected to Tether’s move lower and back up again over the past 36 hours.
The statement was attributed to Leonardo Real of Tether:
“Tether is the leading provider of tokenized fiat currencies and is listed on many exchanges worldwide. We would like to reiterate that although markets have shown temporary fluctuations in price, all USDT in circulation are sufficiently backed by U.S. dollars (USD) and that assets have always exceeded liabilities. In June 2018, a report from Freeh Sporkin & Sullivan, LLP (FSS), based on a random date balance inspection and a full review of relevant documentation of bank accounts, confirmed that all Tethers in circulation as of that date were indeed fully backed by USD reserves.”
Tether is making an attempt to adjust the dialogue around the ‘stablecoin’ that is nearly eponymous as a trading pair across crypto’s largest exchanges.
As it stands today, Binance as an example, holds more than 768.5 million in its reserves, according to a wallet posted to Tether.to. Tether, the company behind the stablecoin, comes in second with 486.7 million tokens.
Another Tether breakdown, or further discomfort with that kind of token asset base at stake, would cause market fluctuations that may not be as kind as the ones that occurred just 24 hours ago.
In our opinion, this statement is, at a minimum, 12 hours late. The Tether team would do well to stick a bit closer to their PR strategists and provide continued explanations should they be needed going forward.
A quick look at what led to the Tether statement/release:
Tether’s USDT/USD pair lost came crashing down below 0.95-fiat at the beginning of the Asian session. It eventually formed lower lows towards 0.85-fiat, before correcting higher towards 0.90-fiat. The pair, however, continues to be far from its $1-peg that is creating a negative sentiment about its future in the crypto space.
As per a tweet on KuCoin’s official Twitter handle, the firm has announced that it will be temporarily suspending all USDT transactions across its platform. While there appears to be no major reason for this sudden halt, it seems as though this move is part of a larger wallet maintenance regime that KuCoin adheres to regularly.
Crypto exchange Binance, the world’s largest by volume, suspended withdrawals of the tether (USDT) stablecoin Monday morning during what it called a period of heightened activity.
Withdrawal functionality has since been returned, according to Binance’s website, which previously stated “wallet maintenance, withdrawal suspended” on the page for USDT. A customer service administrator on the platform’s English-language Telegram channel had previously said that the suspension was due to “USDT network congestion.”
Withdrawal suspensions, market reactions, statements, and a stablecoin that seems to be having a problem with the ‘stable’ moniker at the moment.
As of this print, Tether was inching significantly closer to it’s stated 1:1 token/dollar ratio. The drop all the way to $0.86 simply shouldn’t happen. Unless there is a consortium of market manipulators at work. Nah, that could never happen, could it?