We have previously reported certain doubts regarding a digital currency called Tether. USDT is a Tether token that is backed by the US dollar in a 1: 1 ratio. At the same time, it is assumed that the company keeps on its accounts a sufficient amount of US dollars to ensure the entire volume of USDT tokens in circulation. USDT tokens can be traded, exchanged like regular cryptocurrencies, and at any time exchanged for fiat, which is in the company’s bank accounts.
Tether and Bitfinex are sister companies with the same owners. Both companies have recently experienced difficulty gaining access to their own bank accounts. It all started when the Wells Fargo correspondent bank refused to process incoming and outgoing payments.
The Tether user agreement raises the most questions from users.
“Once you receive Tether tokens, you can trade or pay for services. However, Tether is not money, monetary instrument, or currency. No contractual rights or other rights can be brought against us for the purpose of redeeming or exchanging Tether for cash. We do not guarantee the right to redeem or exchange Tether for money on our part. You are not insured against losses when buying, selling, exchanging and redeeming Tether “.
We see a company that creates digital money, but declares that it is not. The company does not guarantee the possibility of exchanging tokens for money.
Tether assures users that it undergoes regular audits to ensure it has sufficient funds in its accounts to redeem USDT tokens. However, to this day, the company has not provided supporting documents. They promise to carry out additional audits, but the last audit they refer to was carried out in March, after which the number of tokens in circulation increased by several tens of millions..
When Reddit users ask if the company is going to conduct an audit at all, Bitfinex employee bfx_drew invites users to make a bet. A rather strange form of customer support.
Many Reddit users do not understand how a company with limited access to bank accounts can receive deposits of hundreds of millions of dollars. If they do not receive such deposits, it means that not all USDT tokens in circulation are backed by fiat. This, in turn, means that Tether is practicing a partial reserve.
An official announcement appeared on the Tether website yesterday, in which the company tried to answer user questions..
“We know there is a debate on the internet about the lack of publicly available Tether audits. Periodic audits of our bank accounts were carried out by the Taiwanese firm TOPSUN CPAs & Co. The results of these audits are provided by the shareholders in the company. In their current form, they are not intended for the general public (to begin with, they are in Mandarin Chinese). However, we have asked for several documents to be submitted to the community in English: December 31, 2016, January 31, 2017, February 28, 2017, March 31, 2017. Since we are no longer discussed in Taiwan, we contacted Friedman, LLP in New York which audits our accounts on a quarterly basis starting December 31, 2016. We will present the results in the coming weeks or months as soon as they become available. “.
The company also answers the question about the conditions under which it can waive its obligations. Tether writes that users cannot have any problems with exchanging tokens. The current version of the rules was drafted so that the service could not be used by citizens of countries under sanctions, which again raises questions about the safety of using Tether.
The company says that despite some difficulties, it was able to create banking channels that allow it to transfer tens of millions of dollars a day. According to Tether, this should be enough to meet the current market needs..
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