- Tether’s CTO, Paolo Ardoino, has identified a coordinated attack on USDT by traditional hedge funds shorting the stablecoin.
- According to Mr. Ardoino, the attack involves a new wave of FUD, trolling, clowns, and more.
- Mr. Ardoino has reiterated that Tether is 100% backed by reserves.
- He also added that Tether is phasing out its reserve exposure of commercial paper in preference to US treasuries.
Tether’s and Bitfinex’s CTO, Paolo Ardoino, has identified a coordinated attack on USDT by traditional hedge funds shorting the stablecoin. The Tether CTO points out, through a twelve-part Twitter thread that can be found below, that the attacks involve a new wave of FUD, troll armies, clowns, and more.
I have been open about the attempts from some hedge funds that were trying to cause further panic on the market after TERRA/LUNA collapse.
It really seemed from the beginning a coordinated attack, with a new wave of FUD, troll armies, clowns etc. https://t.co/hhcsgHV1Ow
— Paolo Ardoino (@paoloardoino) June 27, 2022
Traditional Hedge Funds are Betting Against Tether – Wall Street Journal.
Mr. Ardoino was responding to a Wall Street Journal report pointing out that the aforementioned hedge funds ‘have been ramping up their bets against Tether’ through Genesis Global Trading Inc., one of the largest crypto brokerages for professional investors.
The Wall Street Journal Report explains that the short sellers have been betting against Tether for the last 12 months, with their interest increasing after TeraUSD’s (UST) collapse. The same short sellers believe that ‘tether’s commercial-paper holdings are backed by debt-ridden Chinese property developers.’
USDT is 100% Backed – Tether CTO.
It is with this background that Tether’s CTO has pointed out in the Twitter thread that the same hedge funds believe Tether is not 100% backed, that its had exposure to Evergrande and that it has 85% exposure to Chinese commercial paper.
Furthermore, Mr. Ardoino stated that the hedge funds also believe Tether is ‘issued from thin air’ and that ‘lenders were borrowing from Tether without over-collateralization.’
Mr. Ardoino reiterates that the USDT was 100% backed and Tether has remained transparent over the years. The company plans to phase out its reserves in the form of commercial paper and replace them entirely with US Treasuries. He said:
Despite all the public 3rd party attestations, our collaboration with regulators, our increased transparency efforts, our commitment to phase out CP exposure and move into US Treasuries, our settlements, … they kept thinking and suggesting that we, Tether, are the bad guys.
But as we always said, Tether had/has in fact >= 100% of the backing, never failed a redemption and all USDt are redeemed at 1$.
Tether Has Continually Honored Redemptions of USDT to USD
Tether’s CTO also highlighted that the company continues to honor redemptions of USDT into USD even during the toughest of times in the crypto markets. He said:
In 48 hours Tether processed 7B in redemptions, averaging 10% of our total assets, something almost impossible even for banking institutions.
In more than one month Tether processed 16B in redemptions (~19% of our total reserves), again proving that our operations, portfolio, banking infrastructure and team are solid and battle tested.
US Government Prohibits American Citizens from Interacting with Tornado Cash
- The U.S. sanctioned Tornado Cash, the mixing token that makes Ethereum transactions untraceable.
- The U.S. Treasury’s Office of Foreign Asset Control posted the updated sanctions list.
- The order makes it illegal for U.S. citizens to use Tornado Cash.
- Tornado Cash is open source, and many believe the sanctions deny Americans their “constitutional right to anonymity.”
Tornado cash has just today been sanctioned by the U.S. Government, a move which would presumably prohibit any address that interacted with it. This is not the first time the U.S. Treasury’s Office of Foreign Asset Control (OFAC) targeted crypto mixers after sanctioning Bitcoin Mixer Blender back in May.
According to Senior Crypto Analyst Dylan LeClair, CirclePay’s USDC has officially blacklisted every Ethereum address sanctioned by the U.S. Treasury.
According to OFAC, the virtual currency mixer Tornado Cash has been used to launder around $7 billion of virtual currency since its creation in 2019. The U.S. claims that Tornado Cash is a haven for malicious cyber activities in Northern Korea and other criminal groups.
“Today, for the first time, Treasury is sanctioning a virtual currency mixer,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson in the press release.
“Virtual currency mixers that assist illicit transactions threaten U.S. national security interests. We are taking action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered.”
Blender and Tornado Cash have been linked to Lazarus Group, a cyber hacking group that has carried the largest virtual currency hacks to date. Its victims were Axie Infinity, from which almost $620 million were stolen, and around $20.5 million was used on Blender to launder the illicit proceeds.
According to data from blockchain firm Nansen, Ethereum transactions spiked after Axie Infinity’s hack last year.
Crypto advocates are not happy with the move. Jerry Brito, executive director of Coin Center, told Fortune that the sanction denies Americans “their constitutional right to anonymity.” According to Brito, anyone who interacts with addresses could be in violation, even if they received funds from Tornado Cash without their consent. He believes that because the fund is open source, nothing stops a money launderer from tweaking the code and creating a fork of the chain.
The U.S Treasury Department official said on a press call that they would continue monitoring mixers and would immediately take action when required.
Binance Removes Off-Chain Fund Transfer Channel Between Itself And WazirX
- Binance has ceased the off-chain fund transfer channel between itself and WazirX
- On-chain transfers will still be available for the users to deposit and withdraw.
Leading cryptocurrency exchange Binance has recently decided to remove the off-chain fund transfer channel between itself and the Indian exchange WazirX.
Binance Suspends Off-Chain Transfer Channel Between Itself And WazirX
Per an officially released statement, Binance has reiterated its previous stance against the Indian crypto exchange WazirX, stating that the exchange does not own or manage WazirX in any way possible.
Furthermore, the exchange has now officially removed the off-chain fund transfer channel between the two exchanges, which will come into effect from August 11.
“To provide clarity and protection for users, we are removing the off-chain fund transfer channel between WazirX and Binance. Effective from 2022-08-11 03:00 (UTC), Binance will cease to support off-chain fund transfers between WazirX Exchange and Binance via the “Login with Binance” option.” The blog adds.
In simpler terms, off-chain transfers occur outside of a blockchain network and are actively managed by deploying a mechanism to aid such particular transfers.
The exchange further clarified that it will not be halting its on-chain transfers at the moment.
The exchange later added how Binance will continue to support Indian regulators and provide all necessary assistance needed by the officials to investigate the said matter in depth.
“Moving forward, Binance will support Indian regulators in the ongoing matters concerning WazirX. Binance believes in keeping an open dialogue with regulators, policymakers, and the law enforcement community as we collectively seek to establish a global regulatory framework for the industry.” The blog later adds.
The controversy between Binance and WazirX stemmed two days ago when Binance’s CEO Changpeng Zhao tweeted that the exchange had never officially acquired WazirX.
In a comprehensive thread tweeted later, CZ further added how the WazirX-Binance transaction was never complete, and that the exchange had no control over WazirX’s control operations including “user-sign up, KYC trading and initiating withdrawals.”
Macro Guru Raoul Pal: Most Participants Are Underinvested in Ethereum
- Crypto Expert and Macro Guru Raoul Pal declared on Twitter today that he believes most participants are still underweight in Ethereum.
- The Founder of Real Vision Academy followed on to say that the pain will be at higher entry points, around $2,300.
- Raoul Pal was famously previously bullish on Ethereum on October 29, 2021, where he confirmed he was “irresponsibly long” via a tweet that has been shared many times since on social media.
- Ethereum merge, which will mark the end of POW and transition to POS is scheduled in September.
Real Vision Academy founder and macro guru Raoul Pal posted his thoughts on Ethereum earlier today via his official Twitter account.
According to Pal, Ethereum, the second highest digital asset by market cap, has higher to go in terms of price. The crypto expert believes that most participants in the market are underweight Ethereum and are expecting failure at resistance.
Raoul Pal’s view is that the more significant battle with resistance will be around $2,300. Ethereum’s price is currently $1,768.32%, and the coin has increased 3.3% in the last 24 hours.
Raul Pal shared his market thoughts previously and most famously on October 29, 2021 when he posted a tweet on being “irresponsibly long” on Ethereum.
This tweet faced a lot of criticism on social media, as, at the time, the price of Ethereum was $4,288.10, and it was only a few weeks after the markets crashed, and crypto prices dropped severely when some reached pre-covid prices.
Ethereum Merge scheduled in September
It is important to note that the Ethereum Merge is scheduled soon, with a tentative date of September 19. Ethereum price has increased 43.5% in the past 30 days anticipating the merge. The Ethereum merge will mark the end of proof of work on Ethereum and the full transition to proof of stake. The merge is set to reduce Ethereum’s energy consumption by approximately 99.95 % according to Ethereum’s official website.
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