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Weiss Ratings Alerts Investors About Dangers Of Tether

Weiss Ratings Alerts Investors About Dangers Of Tether
админ
14/02/2018

weissrating Tether 021418 lt 300x214 - Weiss Ratings Alerts Investors About Dangers Of Tether

An independent U. S. rating agency has warned investors about the dangers of Tether, saying it lacks transparency, and casting doubt if the company’s USDT tokens are fully backed by the U. S. dollar.

Tether is the third-largest cryptocurrency by trading volume, behind Bitcoin and Ethereum.

In a blog post published on the Weiss Ratings website, analyst Juan M. Villaverde highlights common fears about the softcoin that claims to be fully covered by U.S. dollar reserves.

“The big issue: There’s never been an audit, and the folks behind Tether has been quite shady when asked. They have continuously claimed their tokens are backed 100% by actual dollars, yet they have failed to present any evidence to support this claim.”

There is apparent consensus on social media that Tether is running a fractional reserve system, according to Weiss Ratings.

It cites observers’ claim that they do not have the dollars to back up all those Tether coins.

Tether has been at the center of controversy recently after Bitfinex and Tether announced that they are severing the relationship between them, and their auditor, Friedman LLP.

Bitfinex, one of the largest crypto exchanges, was Tether’s “sponsor.”

The decision raised fresh warning signs about the company’s finances and whether it had enough reserves on its balance sheet.

Tether is the only cryptocurrency with trading volume that regularly exceeds that of its market cap – one of the main sources of liquidity in the cryptomarkets.

Weiss Ratings points to a possibility that if a major government determines that cryptocurrencies like Tether are being used by exchanges to avoid regulations, and this large source of liquidity suddenly evaporates, it could cause exchange failures. “It could drive investors to liquidate their positions, causing sharp declines in market prices.”

Source

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news
14/02/2018
админ
Related ItemsaboutalertsbalanceBitcoincrypto exchangescryptocurrencydangersEthereumInvestorsmarketmarket pricesratingsTethertradingU.S. dollarweissWeiss Ratings

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