Tether (USDT) has established itself as one of the stable digital cryptocurrency in the world and currently sits at number ten in Market capitalization.
However, the future of the crypto has been embroiled in controversies over alleged manipulation of Bitcoin prices.
Tether alongside BitFinex were mentioned in a report by investigators alleging that both companies were involved in Systematic manipulation of cryptocurrency in 2017.
This allegation stems back to December 2017 when bitcoin price hovered around $20,000 for 1 BTC. Though this has been refuted but there are fears that a recent investigation on this report by control agencies could plunge Tether into chaos.
Tether have swung to action by bringing in a team of experts to defend the company’s role in the debacle. Private law firm Freech Sporkin & Sullivan have been employed by Tether to head an internal investigation of the company’s affairs.
The investigation firm headed by former FBI director Louis Freech has been tasked with restoring the confidence of the crypto community on Tether (USDT). The firm also has the task of convincing investors that the cryptocurrency is fully backed by the US dollar.
Tether has recently been suspected of withholding information about its claimed dollar reserves, as some analysts believe that the company ascertaining that the digital coin is backed by the dollar is false. This critics claim that Tether lacks the sufficient dollars reserve.
Investigations conducted after accusations
This issue remains among critics despite top accounting firm Friedmann LLP conducting an analysis last year on Tether accounts without the blockchain company’s knowledge. The digital coin was found to have an excess of $7 million in its statement.
Critics claim that the report is controversial, they maintain that since Tether had employed Freeh sporkin & Sullivan to conduct the investigation, the transparency and integrity of the result was in doubt.
Even after Friedmann asserted that the investigation had been conducted without the Tether having prior knowledge of the date. This has led to some division among investors and the crypto community.
Tether is considered as one of the stable coins in the cryptocurrency market with the crypto-coin pegged to the US dollars.
However, recent reports released from two respected researchers John Grifin and Amin Shams claims that Bitcoin prices was inflated by manipulative means last December.
Griffin has a reputation for highlighting fraud in the financial market and revealed in the report that trading patterns indicated that several persons at Bitfinex and Tether inflated the digital coin prices. Thios report led to a huge backlash from the cryptocurrency community.
More investigation by regulatory bodies
Earlier this year Both Bitfinex and Tether received subpoena from the US commodity futures trading commission over the price manipulation issues.
Tether also cancelled dealings with the audit firm used for the company’s internal audit. As well, the US justice department investigation of the price boost scandal has thrown a lot of issues towards Tether and its future in the digital currency market.
Recently Binance CEO Changpeng Zhao, expressed his concerns with the way Tether was heading amid fears of a possible crash in USDT.
Zhao intimated in a summit at South Korea that the situation is worrying and Binance had started to list other stable coins.
There have been several falls of fiat currencies, and the case of Tether could be an accident waiting to happen unless the company does an in-house regulation.
Binance CEO Zhao also revealed that he understands the reason why Tether have refused to display its account details.
This could lead to the bank account closing down if released to the crypto community as more transactions would be directed to the statement. Investors would also want to withdraw in mass from the system which could lead to severe problems for the digital coin.
However, Tether is believed by Zhao to have enough to scale through this period of difficulties and suspicions from the cryptocurrency community. Tether has been one of the sought after coin in the past year with good gains recorded in the market since the turn of the year.
Tether should survive this period as the result gotten from Louis Freech should cut the company some slack. Louis Freech is a man of repute and has a fair, unbiased view about business matters. The former FBI man has acquitted the company from all wrongdoing.
Although the credibility of Louis Freeh also cannot be questioned as his records say that he has been a fair judge irrespective of who hires him, the government or the party under question. For now, the debate is on.