- Tether has commenced testing and integration of the Shyft Veriscope solution.
- Veriscope is a decentralized solution for VASP to ensure compliance with the FAFT Travel Rule.
- USDT was launched on the Avalanche blockchain early this month.
Tether Inc., the company behind the largest stablecoin USDT, recently announced it has begun active testing and integration of Veriscope – the proposed decentralized solution for virtual asset service providers (VASPs) to ensure compliance with Financial Action Task Force (FATF) “Travel Rule” requirements.
In order to assist cryptocurrency exchanges, digital wallet providers, and financial institutions with the new FATF Travel Rule requirement, #Tether will begin testing the Shyft platform.https://t.co/7hjSHaMD3k— Tether (@Tether_to) November 19, 2021
Tether adopts Veriscope for compliance
Early in August, Tether and more than 30 other cryptocurrency companies collaborated to launch and oversee the phased deployment of Veriscope on Shyft Network. Using smart contracts, the tool will enable VASP to meet the Travel Rule standard in a decentralized manner.
The FATF tasked the industry in 2019 to come up with a workable technical response to the Travel Rule. The rule demands that VASPs and financial services companies communicate and exchange personally identifiable information (PII) of users sending and receiving funds in an effort to check against money laundering and terrorist financing.
So far, the Shyft Veriscope solution is reportedly the only successful decentralized solution for VASPs to keep compliant with the Travel Rule. Thus, by testing and integrating the solution, Tether adopts a decentralized compliance framework for combating money laundering and terrorism financing, as obliged by the FAFT.
“Veriscope’s opensource solution to discovering VASPs and transmitting customer information is an interesting use case that’s in line with the ethos of Bitcoin,” said Tether CCO, Leonardo Real.
The multi-chain stablecoin
The USDT stablecoin has gained immense growth since the beginning of the year. Besides Ethereum and Tron, USDT is supported on other networks like Solana and Omni. On November 10, it was also extended to the Avalanche blockchain, which further solidified its value as a multi-chain asset.
Per CoinMarketCap, USDT currently has a total market capitalization of $72.99 billion, and it’s the fourth-largest digital currency.
Tether Whales Move Over $533,000,000 in USDT Amid Broad Digital Asset Market Correction – Here’s Where the Crypto Is Going
A severe market correction coincided with a surge in activity from crypto whales, who moved over half a billion dollars worth of stablecoins in a matter of hours, according to a whale-watching bot.
As Bitcoin started to breach the $50,000 level at around 01:30: UTC on Saturday, hundreds of millions of dollars in crypto began flowing between exchanges and wallets.
Whale Alert flagged one of the largest stablecoin transfers in the past day as a deep-pocketed crypto investor moved $116.68 million worth of Tether (USDT) from global crypto exchange Binance and into a wallet of unknown origins.
Also making a splash was another transfer from a different whale on Binance, who moved $118.87 million worth of USDT into an unknown wallet.
Other big transfers that were spotted during the crypto market crash were:
- 117,317,418 USDT worth $117.31 million transferred from Binance to unknown wallet
- 35,999,976 USDT worth $35.99 million transferred from Binance to unknown wallet
- 31,841,112 USDT worth $31.84 million transferred from Kucoin to unknown wallet
- 30,737,954 USDT worth $30.73 million transferred from unknown wallet to CryptoCom
- 29,889,390 USDT worth $29.88 million transferred from Curve Finance to unknown wallet
- 28,600,257 USDT worth $ 28.60 million transferred from unknown wallet to Binance
- 23,344,312 USDT worth $23.34 million transferred from unknown wallet to Huobi
Whale Alert also spotted a massive Bitcoin transfer. The entity shifted 15,074 BTC worth $720.62 billion between wallets of unknown origins.
The whale transfers occurred during one of the largest crypto market meltdowns in recent memory. According to data from Coinglass, about $2.5 billion worth of trades have been liquidated in the past 24 hours.
Tether FUD: The Mystery Behind $1 Billion USDT Print, Will Bitcoin (BTC) Price Pump?
The crypto market is going through another bearish phase this month as the top cryptocurrencies lost majority of their gains from October. Bitcoin (BTC) has failed to hold key support of $55,000 and currently trading at $54,777. Amid growing pressure from the bears, Tether’s latest issuance has created another market FUD.
Tether is often accused of printing additional USDT to pump the BTC market. Even though there hasn’t been conclusive evidence for the claims, the controversy around Tether’s reserves only adds fuel to the fire. The latest issuance of $1 billion USDT has created a similar controversy especially given the crypto market is bleeding.
Tether treasury printed a billion-dollar worth of USDT on November 26, the same day the crypto market fell sharply due to Covid-19 new variant induced fears in the stock market. Infamous crypto Twitter account that goes by the name of Mr. Whale claimed that Tether treasury minted $1 billion out of thin air.
The controversy also comes at a time when the US federal agencies have demanded more power from Congress to crack down on the stablecoin market. Tether has always been a major concern for the regulators, given its past record with the mismanagement of USDT reserves. The stablecoin issuer was recently fined $41 million by CFTC over misleading claims. However, this wasn’t the first time that Tether has found itself at the receiving end of regulatory agencies.
Earlier in February this year, Tether settled a long-drawn case with the New York Attorney General (NYAG) Office for mismanagement of funds. Tether was fined $18.5 million and barred from offering any service in New York.
Will BTC Price Pump Post Tether Issuance?
Bitcoin’s (BTC) price showed minor recovery earlier today, reaching a daily high of $55,329 before retracing below the $55K support zone again. The top cryptocurrency has lost more than 20% from its all-time high of $68,789 in October.
With November turning bearish again, the major price targets of $98K seem to be out of the picture. Plan B, the Bitcoin analyst who popularised the Stock-to-Flow model admitted that BTC is set to miss its first price target of November.
Floor model $98K Nov close will probably be a first miss (after nailing Aug, Sep, Oct). S2F model not affected and indeed on track towards $100K. pic.twitter.com/QO3bRUoGo3— PlanB (@100trillionUSD) November 25, 2021
Tether to work with regulators to address stablecoin concerns
- Sen. Sherrod Brown has sent letters to stablecoin issuers and crypto exchanges requesting information on how they are protecting consumers and investors.
- Tether in response to the press release issued by Sen. Brown Tether has assured that they would be working with lawmakers to improve the industry.
The recent surge of the crypto market value has called for the need to protect investors through designed regulations. With the majority of the concerns focussing on the highly volatile assets, stablecoins like Tether (USDT) that hold the value and stability of another financial asset have not been spared. In a recent report by the President’s Working Group on Financial Markets, stablecoin was said to pose a huge risk to investors as the unregulated assets are a threat to market integrity and investors’ protection.
The report highlights that stablecoins may lead to “possible fraud and misconduct in digital asset trading, including market manipulation, insider trading, and front running, as well as a lack of trading or price transparency.”
In response to the concerns highlighted in the report, Sen. Sherrod Brown, Chair of the U.S. Senate Committee on Banking, Housing, and Urban has sent letters to stablecoin issuers and crypto exchanges requesting information on how they are protecting consumers and investors.
A copy of the letter was sent to Gemini, Paxos, Coinbase, Tetter, Circle, Binance.US, and TrustToken.
Sen. Brown wrote in the letter to Circle:
I have significant concerns with the non-standardized terms applicable to redemption of particular stablecoins, how those terms differ from traditional assets, and how those terms may not be consistent across digital asset trading platforms.
Tether ready to collaborate to meet investors protection standard
Tether in response to the press release issued by Sen. Brown has assured that they would be working with lawmakers to improve the industry.
We appreciate the interest from lawmakers in the function, purpose, and security of all stablecoins across the cryptocurrency ecosystem. We have been and are pleased to work with policymakers around the world on these important issues.
It is critical that we work collaboratively to build this industry. As pioneers of blockchain technology and leaders in transparency and innovation, Tether is dedicated making sure our customers are properly protected and have the tools they need to succeed. 2/3— Tether (@Tether_to) November 25, 2021
In early October, the Securities and Exchange Commission (SEC) issued a subpoena of which Circle, the issuer of USD Coin (USDC) pledged to fully cooperate with the regulators. Circle has also hinted that to meet the required accountability standard, it will be working to become more transparent.
Authorities at G20 have also called for the regulation of stablecoins before they are approved for use. Not just that, it was also said the Central Bank Digital Currencies (CBDCs) must be implemented before global stablecoin use.
Recently, the tech probe launched by the Consumer Financial Protection Bureau (CFPB) included stablecoins. According to Rohit Chopra, the director, stablecoins issued by a big tech firm could see a fast and widespread adoption when it leverages its large user base. SEC Chair Gary Gensler also referred to stablecoins as “Poker Chips” after it was reported that SEC has decided to crack down on the market.
Regulators are primarily concerned about the asset backing of stablecoins though it is said to be pegged in the value to the US Dollar. However, the popular stablecoins are actually backed by commercial paper like Tether and US Treasury debt like USD Coin.