It outlined the theory that Tether had been 'printing money' and the claims some were making that they faked being hacked - as a creative way to balance their books.
Today Bloomberg published an article that's being shared everywhere in the cryptocurrency world, 'U.S. Regulators Subpoena Crypto Exchange Bitfinex, Tether' (Link)
What's unclear now is - does a subpoena even matter? Bitfinex banned US customers from their exchange last August, so at least on an official basis - they're not operating in the United States.
Now I want to make one thing clear - I do NOT believe if the worst is true, that it would crash the crypto markets. What could however crash the markets is fears that it could crash the markets. Sounds silly but it's really that simple.
But, there's a difference between what I think, and Litecoin creator Charlie Lee thinks. I do believe, that there are valid reasons it could slightly adjust the value of multiple coins, but any drop larger than 10% or so would be people selling out of fear. Charlie Lee however believes a Tether collapse, should only effect Tether itself.
We discussed this earlier today on twitter:
For the record - I like Charlie, just a friendly debate. But the point I think we cannot forget is - Tether is not just another altcoin, because it doesn't function like one.
Other coins value is based on what people are willing to buy and sell them for on exchanges. Tether however, is given it's value by believing a USD reserve equal in value to Tether's market cap exists.
If that reserve doesn't exist - the value of anything purchased with Tether is thrown into question.
What do you think? Tweet me @RossFM
Author: Ross Davis
San Francisco News Desk
