Crypto Market Unhinged by Tether Lawsuit
By Luke Flowers – Crypto Specialist
Once more, the crypto market pays no heat about the negative publicity surrounding Tether (USDT), which is the most popular stablecoin and is still worth one US dollar. Even though the recent lawsuit is expected on the two companies Tether and Bitfinex, the trading volumes of the coin suggest many are still buying crypto on this chain to trade Bitcoin and other cryptocurrencies, as reported by Bloomberg.
As reported on October 6, a major class-action lawsuit has been filed against crypto exchange Bitfinex and its sister company Tether, claiming that both used USDT to manipulate the crypto markets during the 2017-2018 bull market involving schemes of fraud, pump-and-dumps along with money laundering-related ploys.
Tether has always been issued in conjunction with demand. If a user wished to buy crypto on the chain, that value would be transferred and fully backed in the reserve. This means the number of coins in issuance is the value held in reserve which many have questioned in the past. An increase in the issuance of Tether when users are buying crypto at a lesser rate could result in inflated market prices.
Ever since this news broke, the most popular stablecoin in the world and fifth coin by total market capitalisation has been trading above 1 USD. The markets notice or care little about the news, but several have delivered comments regarding the lawsuit in which they showcase differences of opinions and divisiveness.
Emin Gün Sirer, CEO of Ava Labs, was one of the people to notice this. He states that “Cryptotwitter is fiercely divided on Tether,” with some believing that USDT is “the key ingredient of repeated pump-and-dumps,” while others think its “an accurate and semi-transparent reflection of natural market forces.”
He also said in the same thread that this is “a monumental lawsuit against Tether-based manipulation of cryptocurrency prices,” led by an “absolutely top-notch” law firm.
A lawsuit like this can have a profound effect on the price of an asset as many may be encouraged to buy cryptocurrency on another chain to trade.
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