Hodler’s Digest, April 29 – May 5: Top Stories, Price Movements, Quotes and FUD of the Week
Cointelegraph
Published May 05, 2019 03:36PM ET
Updated May 05, 2019 04:03PM ET
Hodler’s Digest, April 29 – May 5: Top Stories, Price Movements, Quotes and FUD of the Week
Fractional Reserve Stablecoin Tether Only 74% Backed by Fiat Currency, Say Lawyers
According to documents released by USD stablecoin tether’s (USDT) lawyers, the company behind the stablecoin only has enough fiat reserves to back a little less than three-quarters of its existing supply — 74%. Tether executives had previously publicly promised that each tether was backed one-to-one to the USD, a claim that has been disproven by the lawyers’ document release. The need to release the figures comes from the recent claims by the U.S. attorney general in New York that cryptocurrency exchange Bitfinex, which shares its CEO with Tether, used reserves to plug holes left from a problematic outsourcing agreement earlier in 2018. The document notes that the funds are invested, and the arrangement mimics a fractional reserve system.
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