That’s what some are wondering after Tether, the makers of the dollar-pegged crypto asset, USDT, made an announcement Wednesday insisting that its tokens – valued at $2.6 billion – are fully-backed by real cash (according to one law firm, at least). For months, Tether has fought accusations that it is falsely issuing tokens without actually having the dollar reserves to back them.
The company had even initially partnered with an audit firm to undergo a full inspection. That working relationship, however, was dissolved back in early January.
Some background on Tether: Unlike bitcoin or ethereum, which does not have traditional assets affirming its value, USDT can boast a relatively secure store of value being pegged to the dollar. As such, investors view tether as less of an investment and more of a tool to move funds from one cryptocurrency exchange to another.
The problem is that if allegations over tether not having the funds to back their tokens are indeed true, there’s less money than is currently being depicted in the cryptocurrency markets and in fact more reason to believe cryptocurrency prices are inflated. So, bringing this story back around to the latest announcement, the general consensus is that no, the claim still can’t be proven.
As explained by @Bitfinexed, a well-known critic of the company, the issue with the review is that it isn’t really an audit. This is important to note because audits are generally held to a greater degree of accountability and integrity than legal reviews, which is what many are saying needs to be done for claims of tether’s reliability to be even remotely affirmed. Read more from coindesk.com…
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