With the financial troubles of Puerto Rico-based Noble Bank, where dollar reserves of stablecoin Tether are supposedly located, cryptocurrency exchange Bitfinex has felt the need to dismiss claims of insolvency.
“Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this,” the exchange said in a blog post. To support its argument, Bitfinex showed several cryptocurrency wallets it holds for clients. Presented were $980 million worth of BTC, $394 million worth of ETH, and $203 million worth of EOS.
“How any rational party can claim insolvency when the opposite is there for all to see is interesting and, once again, perhaps indicative of a targeted campaign based on nothing but fiction,” Bitfinex said. However, it neglected to shows its balances in fiat currencies, and in Tether, which is supposedly 100% backed by the U.S. dollar.
Bitfinex’s post was a reaction to articles such as one by Medium writer ProofofResearch, who warned Bitfinex users to “remove your money now.” The article cited reports of customers unable to withdraw their fiat balances, of not being able to contact customer service, and of Bitfinex subreddits being deleted where customers claim not having received funds. “[I]t is simply unsafe for anyone to use the Bitfinex exchange or Tether since Tether is directly attached to Bitfinex,” ProofofResearch said.
Tether Limited, which issues Tether, has been linked to Bitfinex due to the same people listed in their articles of incorporation. After reports of Bitfinex and Tether Limited no longer being clients of Noble Bank, and of the bank being badly in need of funds, Tether’s stability has been once more called into question.
But Bitfinex brushed off such concerns, stating, “Stories and allegations currently circulating mentioning an entity called Noble Bank have no impact on our operations, survivability, or solvency.”
It also noted that its fiat and cryptocurrency withdrawal services were “functioning as normal,” although “[c]omplications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations.”
Tether Limited has remained dodgy about being subject to an audit, though it procured the services of law firm Freeh, Sporkin & Sullivan LLP (FSS), that said, “FSS is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018.” The same report by FSS also made the qualification that “the above confirmation of bank and Tether balances should not be construed as the results of an audit and were not conducted in accordance with Generally Accepted Auditing Standards.”
Bitfinex had been accused in 2017 of helping pump up the price of BTC to its record high of near $20,000 a coin. BTC is currently trading at about a third of its peak.
The exchange has been hacked several times. An August 2016 hack led to 120,000 BTC, worth about $70 million at the time, being stolen. Tether Limited has also been victim to a hack, with $31 million stolen from the Tether Treasury Wallet last November.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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The stablecoin Tether may not be as stable as many have believed – not that this would be a huge surprise to some. It would appear that Puerto Rico’s Noble Bank, reportedly one of the major repositories of Tether, is having serious financial issues. As a bank that supposedly holds a 1-to-1 ratio of Tether to US dollars, the fact that the financial institution is “desperately” looking for cash raises a number of questions.
Noble Bank was first identified as being involved with Tether this past February. Since then, a large number of Tether have been produced. Since each coin must have a physical dollar behind it, the amount of dollars stored in the banks, in theory, should be extremely high.
However, Noble Bank is looking for a serious injection of funds. Two sources close to the bank have indicated that it has already contacted at least one major Tether holder in an effort to unload an unspecified amount of coins, but the holder rejected the request. One of the sources said, “If Noble doesn’t get cash soon, they will only have a few days left. They’re desperate.”
Tether might also be in a bad position. An unidentified source for a major crypto exchange told the crypto media outlet Modern Consensus that a Tether holder has been trying to dump “tens of millions of tethers,” but that the individual has not found a taker. That kind of release at once could have dire consequences on the stability of the stablecoin and could make it obsolete.
There have already been accusations of improprieties among the Tether group. On more than one occasion, reports have surfaced that the company has been releasing tethers that weren’t supported by any asset, and using them to purchase other cryptocurrencies.
Tether is also facing competition from several other stablecoins. Gemini and Paxos have introduced stablecoins recently, both of which are regulated and audited by the New York Department of Financial Services. Tether has been without an auditor since this past January and has made the questionable remark that auditing the coin is an impossibility. It would seem that, if there were one dollar for every tether, an audit would be a relatively simple process to complete. Circle also has introduced its own stablecoin. The coin itself isn’t regulated; however, Circle is.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
The post Tether bank “desperate for cash” appeared first on Coingeek.
The stablecoin Tether may not be as stable as many have believed – not that this would be a huge surprise to some. It would appear that Puerto Rico’s Noble Bank, reportedly one of the major repositories of Tether, is having serious financial issues. As a bank that supposedly holds a 1-to-1 ratio of Tether to US dollars, the fact that the financial institution is “desperately” looking for cash raises a number of questions.
Noble Bank was first identified as being involved with Tether this past February. Since then, a large number of Tether have been produced. Since each coin must have a physical dollar behind it, the amount of dollars stored in the banks, in theory, should be extremely high.
However, Noble Bank is looking for a serious injection of funds. Two sources close to the bank have indicated that it has already contacted at least one major Tether holder in an effort to unload an unspecified amount of coins, but the holder rejected the request. One of the sources said, “If Noble doesn’t get cash soon, they will only have a few days left. They’re desperate.”
Tether might also be in a bad position. An unidentified source for a major crypto exchange told the crypto media outlet Modern Consensus that a Tether holder has been trying to dump “tens of millions of tethers,” but that the individual has not found a taker. That kind of release at once could have dire consequences on the stability of the stablecoin and could make it obsolete.
There have already been accusations of improprieties among the Tether group. On more than one occasion, reports have surfaced that the company has been releasing tethers that weren’t supported by any asset, and using them to purchase other cryptocurrencies.
Tether is also facing competition from several other stablecoins. Gemini and Paxos have introduced stablecoins recently, both of which are regulated and audited by the New York Department of Financial Services. Tether has been without an auditor since this past January and has made the questionable remark that auditing the coin is an impossibility. It would seem that, if there were one dollar for every tether, an audit would be a relatively simple process to complete. Circle also has introduced its own stablecoin. The coin itself isn’t regulated; however, Circle is.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
The post Tether bank “desperate for cash” appeared first on Coingeek.
