Understanding the drawbacks and limitations of Tether.
What is Tether coin? And Why is it considered a scam?
Elementally, as we all know that Tether is one of the pre-eminent cryptocurrency stable coins, whose value is pegged to that of the US dollars. This, in simple words, jots down that 1 USD = 1 USDT. It is also one of the most speculative ones for mixed reasons. Below are some of them.
1. The company backing Tether, Tether Limited, claims to secure the stability of the Tether coins, through the actual USD reserves, but not even a single auditing firm has confirmed the same, recently. Even the supply of the tokens keeps on increasing regularly. Therefore, speculations are always on the higher side of the spectrum, when it comes to the legitimacy of the Tether coin.
2. Many cryptocurrency experts speculate that Tether is a fraud, and it is all a tether scam, as it is not considered as a legal tender. This has indirectly rendered the Crypto enthusiast to point at the legal status and transparency of the Blockchain project.
3. According to most of the cybersecurity experts and the cryptocurrency critics, it has been announced that the USDT or the Tether coin manipulates the prices of Bitcoin. It is assumed that Tethers are only minted during the Bitcoin price fall, to stabilize the cryptocurrency market and is not entirely backed by millions of Fiat Reserves. Even the most famous economist, Nouriel Roubini, believes the same.
4. Reddit is one of the most popular cryptocurrency discussion fora. On this website, when users wanted to gain opinion regarding the previous experience of any user, for the conversion of the Tether coins into the actual US dollars. A deafening silence was looming over the post, which indeed pointed to the opacity of the cryptocurrency coin.
5. According to the company’s website, officially, no guarantee is provided for the redemption or any losses that the users incur. Indirectly, the user is the only responsible person, for all of these actions concerning the Tether coin.
6. Also, according to the company’s terms of services, the Tether tokens redemption can be rejected without any mention of the exclusive reason. This is a significant issue with respect to the open legal documents, as they do not care to mention the circumstances in which they would do so.
7. There are also a number of instances that point towards the fraudulent nature of Tether coins. As in January 2018, the Tether coin Blockchain platform withdrew its collaboration with a third party auditing firm from Taiwan.
8. The Tether coin Blockchain platform is also estimated to switch many auditing firms of different countries.
Is Bitfinex safe?
Bitfinex is the Cryptocurrency Exchange which is uniquely assisted by the query, is Bitfinex safe? The platform is continuously speculated to be a part of the Tether coin fraud, as many pre-eminent figures from Bitfinex had represented Tether during its initiation. Due to its connections with Bitfinex, it is even rumored that Tether coins are used for margin lending on Bitfinex, illegally.
It is essential to know that the Crypto exchanges make profits from the interest, from the lent Tether coins. This is highly ridiculous, as Tether Limited, do not provide a guaranteed for the redemption of Tether coins with the actual Fiat currency.
Bitfinex vs Binance
Tether is among the most widely used stablecoins on crypto exchanges around the world. However, the US-backed stablecoin has been surrounded by various controversies over the years. Earlier this year NY attorney general filed a lawsuit against crypto exchange Bitfinex and Tether for draining reserve of the dollar-backed coin to cover up the loss of exchange worth $700 million. It is also reported that around three hundred addresses hold 80% of the total Tether supply and major whales, who hold the stable coin include crypto exchanges Bitfinex and Binance. Because of this uneven distribution tether has been linked to market manipulations several times. Supporting Tether certainly extends a controversial era to the exchange. The manipulations can even lead to a binance crash if come out to be true. Many reports have claimed that Tether does not have enough dollar reserve to back all USDT in circulation.
Does this arise several doubts concerning is binance safe? Is USDT safe? Is there even a binance vs bitfinex or both of the exchanges fuel scams? Also, the Tether of defeat is used in people’s own interests, changing the path of the bitcoin from positive to negative or vice versa.
The positive side of the Tether coin
A myriad of Crypto exchanges like Binance, Bitfinex, Poloniex, etc. have incorporated Tether instead of the actual US dollars, as including USD would require many legal procedures to be followed by the exchanges. Moreover, Bitfinex funding in Tether has achieved a reprieve in the case with the NYAG. Therefore, Tether effectively eliminates the legal intervention of the government. Adding on to the upper hand, they even provide higher transaction speeds when compared to that of the Fiat currency. Therefore, it is also used as an alternative to US dollars.