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Tether’s bank reaffirms circulating USDT is backed by reserves

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Tether’s bank has moved to quash fresh fears circulating in the cryptocurrency ecosystem that USDT is not fully backed by reserves.

As initially reported by Coindesk, Tether’s Bahamas-based bank Deltec has reaffirmed that the amount of circulating USDT is fully backed by reserves. The bank’s deputy CEO Gergory Pepin addressed resurgent speculation about Tether’s reserve policies on the popular ‘Unchained’ cryptocurrency podcast this week.

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Pepin insisted that every USDT token in circulation is backed by reserves that are currently greater than the circulating supply of Tether tokens. USDT is a stablecoin that is backed by the US Dollar at a 1:1 ratio.

Concerns among the cryptocurrency community stem from a long history around Tether and its reserve policy. The company has drawn criticism in recent years for failing to carry out an objective third party audit of its reserves and it has been involved in a lengthy legal battle regarding the movement of funds between Tether and Bitfinex, the cryptocurrency exchange that is owned by the same parent company iFinex.

For a long period Tether insisted that every USDT was backed by dollars but in 2019 it was revealed that the firm only held around 74% of fiat reserves for circulating USDT, while the rest of its reserves were held in cash-equivalents and other assets.

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Massive growth once again

Tether’s supply has been intrinsically linked with the success of the cryptocurrency markets and the supply of USDT has often increased during periods of heightened market activity. This was seen in 2017 as Bitcoin neared $20,000 for the first time and again over the past six months as the cryptocurrency markets surged to newfound highs.

The market capitalization of USDT currently stands at around $24bln in value according to Coinmarketcap, which puts Tether’s token in third place on the overall list of cryptocurrencies by their market cap.

There’s been a fair bit of fear-mongering towards Tether in recent weeks, but Pepin addressed some freshly raised concerns about its reserves during the podcast. He rubbished claims that Deltec had been buying BTC for Tether, after the bank had revealed that it had been purchasing Bitcoin for some of its other clients.

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“We have a very competent and well-respected investment team. And as part of their portfolio education for customers, they actually did an allocation in bitcoin on behalf of those customers,” Pepin said during the interview.

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Tether and Bitfinex Ordered to Pay $42.5 Million Fine by the CFTC

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Tether and Bitfinex were ordered by the CFTC to pay fines worth a total of $42.5 million for various violations.

The United States Commodity and Futures Trading Commission (CFTC) has ordered Tether and Bitfinex to pay fines worth $42.5 million.

  • In a release from today, October 15th, Tether Holdings Limited, Tether Limited, Tether Operations Limited, and Tether International Limited – all companies associated with the issuer of the largest stablecoin USDT, Tether, were ordered to pay a fine worth $41 million.
  • This was issued by the CFTC on the grounds of “misleading statements and omissions of material fact in connection with the U.S. dollar token USDT.”
  • Additionally, the companies have been ordered to cease and desist from any further violations of the CEA (Commodity Exchange Act).
  • Going forward, the Commission also issued a separate order against BFXNA Inc., iFinex Inc., and BFXWW Inc – companies associated with the popular cryptocurrency exchange Bitfinex.
  • They must pay $1.5 million in a civil monetary penalty for engaging in illegal, off-exchange retail commodity transactions with US citizens on the cryptocurrency exchange.
  • Commenting on the matter was Rostin Behnam, acting chair of the CFTC, who said:

The case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace. […] The CFTC will continue to take decisive action to bring to light untrue or misleading statements that impact CFTC jurisdictional markets.”

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Tether Users To Explore the Maldives With USDT on Travala.com

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  • Travala announces Tether users can now book a trip with USDT.
  • The USDT token can be used on the Travala.com platform.
  • Travala’s native token, AVA, records a 3.35% gain.

The world-leading blockchain-based travel booking platform — Travala continues to incorporate more travel utilities to its platform. Today, the Travala team announced to the Tether fans that they can now book a dream trip to the Maldives with USDT in a tweet.

Particularly, with Tether’s USDT, travelers can book flights and over-the-water bungalows. Not to mention, enjoy activities such as snorkeling, boat excursions, tours, and a lot more on Travala.com.

What’s more, Tether (USDT) is a stablecoin that aims to keep cryptocurrency valuations stable. The USDT tokens in circulation are proportional to U.S. dollars. Meanwhile, the native token of Travala is AVA. AVA is a BEP-2 token based on the Binance Chain.

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Moreover, Travala allows travelers from all across the globe to book and explore several travel options. Travala accepts Credit Card, Debit Card, and cryptocurrency. Besides, AVA’s current price is $3.1 with a market cap of $164,608,058.

To promote accessibility to anyone and everywhere, Travala aligns travel bookings with the ethos of decentralized technology. With AVA, tourists can easily get discounts, loyalty rewards, and other packages on the Travala.com ecosystem.

Ultimately, since its inception in 2017, Travala tasks itself as a firm that brings the travel industry transparent pricing and innovation. What’s more, deliver enhanced security and effective stakeholder interaction.

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On a final note, the AVA token saw a 3.35% increase in the last 24 hours. Travala’s circulating supply is at 52,923,082 AVA and a Total supply of 61,383,832 AVA at press time.

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Tether fires back against report it is using reserves for investments and making crypto-backed loans

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Tether, the largest stablecoin issuer by market capitalization, has refuted the details of a Bloomberg story on its reserves holdings.

In an Oct. 7 report, Bloomberg journalist Zeke Faux made numerous claims against Tether, including that its chief financial officer Giancarlo Devasini has used the company’s reserves to make investments, seemingly contradicting Tether’s public position that the holdings were fully backed at all times. In addition, Faux alleges that Tether has invested in Chinese firms and issued crypto-backed loans “worth billions of dollars.” According to the report, he was only able to confirm one bank in the Bahamas was working directly with Tether.

“Tether still hasn’t disclosed where it’s keeping its money,” said Faux. “If Devasini is taking enough risk to earn even a 1% return on Tether’s entire reserves, that would give him and his partners a $690 million annual profit. But if those loans fail, even a small percentage of them, one Tether would become worth less than $1.”

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Tether called the report a “tired attempt” to undermine the company based on “innuendo and misinformation.” The stablecoin issuer challenged the credibility of Faux’s sources as an attempt “to discredit Giancarlo Devasini and Tether’s executives” and continued to claim its USDT tokens are “fully backed,” citing its quarterly assurance reports.

In February, Tether and Bitfinex agreed to pay New York state $18.5 million in damages and provide extensive reports on its finances as part of a settlement with the New York Attorney General’s Office — the most recent audit was filed with information reported as of June 30. Authorities had claimed Tether misrepresented the degree to which its USDT tokens were backed by fiat collateral.

The Bloomberg report comes as many speculate whether China’s second-largest property developer, Evergrande Group, will default on $300 billion in debts. According to Faux, Tether denied holding any debt from Evergrande but would not confirm whether it held commercial paper from other Chinese firms.

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