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Bitfinex/Tether (USDT) Scandal Knocks $10 Billion Off Market Cap

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The still-recovering crypto market endured a massive loss on Thursday, April 25th, after allegations were made against a popular crypto exchange, Bitfinex. According to the New York Attorney General’s office announcement, the exchange covered up a massive $850 million-large loss by using the crypto market’s largest stablecoin, Tether (USDT). The Attorney General’s office also claims that the amount was taken from customer and corporate funds.

The announcement was followed by a $10 billion drop in the market cap of the entire crypto industry, and it even managed to affect Tether’s peg to the US dollar. However, the newest scandal quickly spread, as mentioned, and even the largest cryptocurrencies are currently experiencing massive losses, as the coin owners entered a massive sellout.

At the time of writing, the largest losses among the top 10 largest coins are being experienced by Ethereum, XRP, and Cardano, with their prices dropping by nearly 5%. Meanwhile, while the total market cap of the crypto industry did drop by $10 billion, and it reached $167 billion at one point, it is currently seeing recovery which allowed it to climb back to $171 billion at the time of writing.

The announcement impacts Tether

As a stablecoin, Tether’s price is supposed to be permanently bound to the price of USD, meaning that 1 USDT = $1. However, at 21:00 UTC on Thursday, USDT price started dropping from the set price of $1 to around $0.955, according to several exchanges and TradingView. The price then climbed back up to $0.97, and at the time of writing, it sits at $0.994120.

The other stablecoins immediately started seeing a lot more usage as numerous investors from around the world shifted from Tether towards them, including GUSD, USDC, and TrueUSD. In addition, Maker (MKR), which is the cryptocurrency behind the MakerDAO project, is also seeing a massive loss of over 14.65%, with its value dropping by over $73 in the past 24 hours.

As for Tether, this is far from being the first scandal in which the stablecoin was involved, and it might impact its future performance and usage. The coin has been rejected by a lot of investors ever since it was suspected that the company behind it might not have the funds to back every single USDT coin in circulation. Now, it is possible that even more investors will avoid using it, which is good news for its competitors, but it might also be devastating for Tether itself.

The crypto space suffers a massive drop in prices

While the announcement by the Attorney General’s office only concerns Tether and Bitfinex, a lot of other major cryptocurrencies had started trading in the red, and seeing massive price drops. Bitcoin, for example, dropped down to $4,953 after the announcement, although it is currently well on its way to recovery, with the price at the time of writing once again being above $5,300.

However, around 4,000 BTC was reportedly moved from Bitfinex following the announcement, which translates to around $20 million. Similar moves were seen before whenever an exchange was considered unsafe or troubled, which is not a particularly surprising reaction.

As mentioned, many other stablecoins started seeing a lot more usage following the announcement, as investors started selling Tether and going for its alternatives, such as GUSD or USDC. Most other coins among the top 10 largest cryptos also saw massive drops, but fortunately, the prices are currently starting to return to normal, indicating that the scandal might not leave particularly large consequences on the entire market.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Photo by Quintin Gellar from Pexels

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Reasons Why You Are Much Safer When Crypto Trading on Dexes

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While many cryptocurrencies aim to bring the change to the world by bringing full decentralization, one aspect of the crypto space still remains mostly centralized, and that is the way they are exchanged. Most crypto exchanges are centralized companies, where traders and investors need to deposit their coins for safekeeping. This is a risky way to handle the funds, as exchanges remain susceptible to hacks and theft, as many realized recently, after the hack of the world’s largest exchange by trading volume, Binance.

During the hack, around 7,000 BTC (over $40 million) was taken, and sent to multiple wallets, never to be seen again — for now, at least. The hack also came as quite a shock, as Binance was known for its efficiency, security, and high levels of confidence. It also made people realize that their coins are not really theirs if they need to rely on third parties, such as exchanges, to keep them safe. As a result, many are now turning away from centralized exchanges, and are heading towards decentralized ones — also known as DEXes.

Here are some reasons why you might want to consider doing the same.

1. True ownership of your coins

The crypto community has a saying: “not your keys, not your coins.” The saying is now more relevant than ever, but it does not apply on DEXes. Decentralized exchanges

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Crypto Billionaire Predicts Massive Price Growth by 2021

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Crypto prices are once again going up, and Bitcoin has just passed a major resistance level at $6,000. With a situation like that, it is not surprising that everyone in the crypto community is looking forward to the future, wondering what to expect in years to come. Many experts have already given their predictions, some more optimistic than others, but almost all bullish.

Crypto billionaire Mike Novogratz has always been very supportive of cryptocurrencies, and very bullish on Bitcoin. He recently stated that he sees the coins’ prices triple in the following 18 months, meaning that Bitcoin’s return to $20,000 might not be far away, according to him.

He noted that Bitcoin is back to $6,000 after its price hit as low as $3,100 only a few months ago. These days, Novogratz does not believe Bitcoin will return to such lows unless there is a devastating exchange hack or a major shift in regulations. Of course, there was a big hack that had the potential to damage the coin’s price, only days ago. The world’s largest crypto exchange by trading volume, Binance, saw a significant security breach which resulted in a theft of 7,000 BTC.

However, so far, the coin did not react negatively to this incident. While Novogratz believed that such an event would shatter the new confidence in BTC, it simply did not happen. However, he…

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Altcoins

TokenRoll (TKR) Platform Will Take Online Casinos to the Next Level

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Corporate executives are turning to blockchain technology more than ever in an attempt to revolutionize the business world.  Although blockchain is still a relatively new concept, that hasn’t stopped more and more companies from jumping on the bandwagon.  This hot new technology has quickly gained a reputation for providing greater transparency, enhanced security, improved traceability, increased efficiency, and low costs.  One industry that could certainly benefit from decentralization is the online gambling market, specifically, online casinos.  TokenRoll (TKR) has developed a platform that appears to offer a promising alternative to centralized casinos.

Problems with Centralized Casinos

The primary reason why blockchain technology is being implemented so quickly is because it solves a lot of the problems typically associated with the traditional business model.  And online casinos are no different.  It still needs to be said that centralized casinos have proven that there is a great demand for online gambling.  The market is growing faster than anyone could have predicted, and future opportunities appear very promising and lucrative.  But industries are continually evolving and this one is no different.

A few of the problems facing centralized casinos include the following:

  • Little to no transparency
  • Consumer lack of confidence
  • Privacy concerns
  • 48-72 hour wait time for withdrawals

These are four monumental issues that need to be addressed quickly given the global growth of the market.  Casinos need to…

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