This answer was originally posted on Quora. . For more trending tech answers from , visit . You can view the answer here Quora HackerNoon.com/quora (Tether being the USD pegged cryptocurrency under the symbol ‘USDT’.) Likely all of them, but BTC primarily. That’s the case if it turns out Tether is being added fraudulently. In case you’re not aware, there is an anonymous account by the name of ‘Bitfinex’ed’ (on and ) that has been on the war path against Tether for months. His theory, at first, seems like a conspiracy theory, but eventually you find out a couple of things that give her/his claims legitimacy: twitter medium This was found out rather recently and confirmed through . The organization that runs and issues Tether is also the same organization that runs Bitfinex. shareholder documents that linked the two organizations The fact that this hasn’t been proven and yet USDT still trades at $1 is astonishing. The organization that runs Tether and Bitfinex have never had a comprehensive audit to prove that every USDT is backed by an equivalent USD. When there was less than $100 million Tether, it’s possible that these investors could be unknowns with a lot of capital. Now we’re well over a billion USDT (edit: 2 Billion USDT as of today) issued and it’s still unclear who these investors are. We do not know who the ‘investors’ are that are locking their funds to produce USDT. But before this week, I would have thought that USDT being found fraudulent would have been like Bitconnect or a major exchange going down: somewhat impactful, but not enough to take harm the market long-term. I now believe that USDT is being used to artificially inflate the price of the BTC and the market. These set of circumstances open the potential for abuse. Last Tuesday (January 16th), the market took a nose dive. BTC and ETH crashed as much as 30% with other cryptocurrencies diving as much as 50%. Around the same time, Tether began issuing at least $50,000,000 worth of Tether every single day. Here’s the price of BTC in January 2018, including days new Tether were added to the ecosystem (credit to Bitfinex’ed). That Tether was immediately used to buy Bitcoin and other digital assets. This means one of two things: Either a group of unknown, unnamed investors issued $750,000,000 worth of USD as Tether (~42% of the total issued supply) to buy the dip until the price recovered, or The Tether that was produced was fraudulent to stop the price from dropping. If it’s scenario 1, an audit would be able to prove the funds can support a 1 to 1 link of USD to USDT. The real bottom is likely far below where it actually landed if the Tether is fake. However, the implication of scenario 2 is pretty scary: We actually didn’t see a real crash on Tuesday. I hate to say it, but I believe that because of this activity, the price of cryptocurrency is being manipulated across the board. For everyone’s sake, I hope it’s not true, but it’s on Tether to prove this is incorrect. Originally published at . www.quora.com For more trending tech answers from , visit . Quora HackerNoon.com/quora
