Tether, a Bitfinex-related company that controls the development of USDT, the main stable coin in the cryptocurrency market. In April, more than 1 billion of his tokens, which were allegedly secured in US dollars, were created. During this period, Bitcoin recovered from the value it had lost as the coronavirus crisis progressed, and rose 22% during the month.
On April 1, Bitcoin opened the month with a trading volume of around $ 6,869. Although it peaked on April 30, the last day of the month, reaching $ 9,318, the day closed at $ 8,751, an increase of 22% for the month.
New USDT tokens were created later in the month, but one of the biggest “problems” with new USDT occurred on April 29, a day before Bitcoin posted its largest month’s surge and traded over $ 9,000 again.
On the 29th, Tether, created over 160 million USDT. The first $ 60 million was minted when Bitcoin was worth a little over $ 8,000. A second $ 100 million transaction was issued. just before BTC exceeded $ 8,500
In just under 12 hours 91 million tokens were transferred from unknown wallets to two exchanges, and most of these tokens – $ 85 million in two transactions – went to Binance.
Tether’s predecessor, originally called “Realcoin”, was announced as a startup in Santa Monica in July 2014 by co-founders Brock Pierce, Reeve Collins and Craig Sellars. The first tokens were issued on October 6, 2014 on the Bitcoin blockchain using the omni-layer protocol. On November 20, 2014, Tether CEO Reeve Collins announced that the project should be rchristened “Tether”.
Since then there has been speculation about Tether and Bitfinex and their possible manipulation in the Bitcoin market. Although Bitfinex has always denied its connection to USDT (the company was the first to support the token in January 2015), In 2017, it became known that the companies had been connected since 2014 and had the same CEO and the same technical “team”.
Investigations by John M. Griffin and Amin Shams in 2018 suggest that the operations are related to Tether and Bitfinex account for about half of Bitcoin’s price hike in late 2017When BTC reached its highest price level near $ 20,000, the researchers suggested that the companies manipulate the market.
A class action lawsuit filed by Eric Young and Adam Kurtz in 2019 claims that Tether, together with iFinex (Bitfinex’s parent company) had manipulated the price of bitcoin, but the lawsuit was dismissed.
In April 2019, New York Attorney General Letitia James filed a lawsuit accusing Bitfinex Use Tether’s reserves to cover a loss of $ 850 million. According to the lawsuit, Bitfinex was unable to establish a normal banking relationship and paid more than $ 1 billion to a Panamanian payment processor called Crypto Capital Corp. a.
The funds were reportedly combined with corporate and customer deposits and no contract was signed with Crypto Capital. James claimed that In 2018, Bitfinex and Tether knew or suspected that Crypto Capital had gotten away with the money, but their investors were never informed of the loss.
Crypto Capital operators have been accused of operating a large money laundering system for the drug cartels in Colombia. The case with the New York law firm is still under investigation in the United States.