- Giancarlo Devasini, Bitfinex’s chief financial officer, owned approximately 43 percent of Tether USDT in 2018.
- Bitfinex CEO Jean-Louis van Der Velde and Chief Counsel Stuart Hoegner, each owned approximately 15 percent of Tether USDT in 2018.
The cryptocurrency market has obtained mass popularity due to its decentralization aspect. Almost all crypto projects have been aspiring to achieve the highest blockchain trilemma as explained by Ethereum key developer Vitalik Buterin. In retrospect, centralization is still in effect in most decentralized crypto protocols, with few key people at the helm of respective projects.
Tether USDT too Centralized
A recent report by the Wall Street Journal has revealed that the largest stablecoin by market capitalization and daily traded volume, Tether USDT, was largely controlled by four individuals by 2018. Specifically, the top Bitfinex and Tether individuals controlled approximately 86 percent of USDT by 2018 according to WSJ.
According to investigatory documents from 2021 probes of Tether by the New York Attorney General and the federal Commodity Futures Trading Commission, four men held Tether hostage in 2018.
Giancarlo Devasini, Bitfinex’s chief financial officer, owned approximately 43 percent of Tether USDT in 2018. Additionally, the documents viewed by WSJ revealed that Bitfinex CEO Jean-Louis van Der Velde and Chief Counsel Stuart Hoegner, each owned approximately 15 percent of Tether USDT in 2018. The fourth Tether USDT whale by 2018 was Christopher Harborne, a British and Thai citizen, who controlled approximately 13 percent of the stablecoin.
The report has, however, been bashed by Paolo Aordino, the chief technology officer (CTO) of Bitfinex and Tether, referring to it as a ‘clown article’.
The more clown articles the more tether grows. People understand that Tether is standing for freedom and inclusion. This is upsetting MSM.
Eventually holepunch will break media as well. 🕳🥊🍐🍐— Paolo Ardoino 🍐 (@paoloardoino) February 2, 2023
Tether, the issuer of USDT, has found itself at loggerheads with regulators due to a lack of clarity on its reserves. In late 2021, Tether was fined $41 million by the US Commodity Futures Trading Commission for misleading statements on its reserves. Notably, the U.S. CFTC found out that only 27.6 percent of the Tether USDT was fully backed by fiat in the period from 2016 through 2018.
Thereby indicating that the four individuals were just minting USDTs out of thin air and putting them in circulation to be purchased with fiat currencies.
Notably, Tether USDT has been closely associated with FTX before its collapse last year. At one time, SBF reportedly asked Tether to print billions of USDT to save the company from collapse. While the company reportedly rejected SBF’s request, Tether lost half of its traded volume after FTX and Alameda collapsed late last year.
Is the Crypto Market in Danger?
The crypto market is heavily dependent on stablecoins, especially during bear and bull markets. While Tether USDT was the main player in the stablecoins market for a long time, other big players including Circle’s USDC, and Binance’s BUSD have emerged. As a result, cryptocurrency traders have the luxury to choose from the best, most regulated, and cost-efficient stablecoin in the market.
Der Beitrag Is Bitcoin and crypto market in danger? Biggest stablecoin of history only controlled by 4 people – WSJ erschien zuerst auf Crypto News Flash.
