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Tether Controversies Continue: Does the World’s Largest Stablecoin Have a Future?

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Tether
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The crypto market crash of 2018 had brought a lot of troubles for the crypto world, and very difficult time, even for the best and strongest of projects. However, this was also a moment when stablecoins got their chance to shine. Due to the fact that they are pegged to other assets of value, such as fiat currencies, other cryptos, and alike — they were able to keep their prices stable and avoid volatility.

Among them, Tether (USDT) emerged as the most popular and largest of stablecoins. However, the coin also had a misfortune of getting involved in one controversy after another. As a result, many have started disregarding the coin, but even so, it still remains one of the largest cryptocurrencies, currently with $2.78 billion-large market cap.

However, the question of how many more scandals will USDT get involved with remains.

Tether scandals keep emerging

The first big issue with Tether came after it was noticed that it avoids audits which would confirm that all of its coins are backed by an appropriate amount of USD. Scandals continued throughout 2018, and even in 2019. One of the most recent ones came when the project updated its terms and conditions in March of this year. The problem was that it failed to make the changes known to the public.

If any traditional PLC did this, it would face massive consequences, including regulatory sanctions, as well as governmental, media, and even investor uproar. However, when it comes to Tether, the situation is more complex.

The new update claims that reserves which provide Tether coins with the value might include assets other than fiat currencies. Many have taken this as a discreet confirmation that Tether truly does not have enough funds to actually back its coins with $1 per coin.

Another, more recent event, got Tether involved in another controversy when one of the major exchanges — Bitfinex — used $850 million in USDT to cover its own losses. This was a major scandal due to the fact that the used coins were, supposedly, owned by investors, and not the exchange itself. What’s more, it appears that both, Tether and Bitfinex are operated by the same firm — iFinex Inc., which is registered with the British Virgin Islands.

This streak of scandals reflects badly not only on Tether but also on the entire crypto industry. What’s more, it puts the industry in jeopardy at the time when a stable project that would act as a true store of value is highly necessary. Meanwhile, Tether has still not provided a clear insight into its funds, not even to a reputable third party which would be able to confirm the state of things to investors.

Tether alternatives proving their worth

With Tether getting involved in one scandal after another, a number of other stablecoins emerged, trying to offer a more decent service. One example is TrueUSD, which also claims to be completely backed by USD. The difference between TUSD and USDT is that TrueUSD allowed insight into its accounts, thus confirming that it is telling the truth.

The company behind the audit, Cohen & Company Accounting Firm, confirmed that TrueUSD has an appropriate amount to cover its circulating supply. This is also not the only stablecoin that was able to confirm its value. diamDEXX, also known as DIAM, also offers stablecoins, although its tokens are backed by diamonds.

This is a popular project as diamonds have been acting as a store of value for a long time, and they represent a trusted asset that can protect and secure wealth. As mentioned, the company is also fully audited by IDEX, a trusted diamond exchange with a nearly two decades worth of reputable history. The company’s CEO, Jeremy Dahan, stated that seeing investors get disappointed in crypto is becoming a common occurrence.

He mentioned that Tether’s scandals caused investors to start speculating on its price when it should be a stable store of value. With a situation like that, Tether appears to be moving away from what it means to be a stablecoin.

While the stablecoins, in general, are a good thing for the crypto world — a trend which is likely to remain for as long as cryptos remain volatile — the same cannot be said about Tether. Stablecoins need to be transparent, even more so than regular cryptocurrencies. The absolute minimum requirement would be that they are audited by a trusted third party which would confirm that their value is real. Without that, they might as well be a scam.

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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.

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Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

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Bitcoin crash
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The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

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Altcoins

Top 3 Coins to Buy Before They Go Big

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Crypto bulls are back, that much is clear. The long-lasting, harsh crypto winter is gone, and the new era in digital currency sector opens up some rather interesting opportunities. With many more bull runs expected to come in months ahead, a lot of coins are likely to blow up and maybe even hit new all-time highs, although that still remains purely theoretical.

On the other hand, the fact is that numerous coins are seeing prices that were not achieved since early 2018, and the overall momentum remains bullish. With that in mind, even if new records do not come for a very long time — chances are that many of the coins will blow up enough for investors to see some serious gains in months to come. As a result, investing in some of these coins now might be a very profitable decision, for those who have the patience to wait a few months. Here are some of the projects believed to have the greatest potential to go big in the second half of 2019 and beyond.

1. TRON (TRX)

Putting TRON on the list should not really surprise anyone, as the project constantly comes up with new project updates, partnerships, and alike. It also constantly breaks records, as is becoming one of the biggest players in the dApp and smart contract development sector.

In the past few…

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Blogs

Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

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crypto credit cards
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It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here,…

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