Novogratz: Lack of Transparency to Blame for Tether’s Loss of USD Peg

Altcoin News | Crypto News | Latest News

Five days since losing its U.S. dollar peg, fiat-backed cryptocurrency tether (USDT) continues to trade at a discount to its supposed $1.00 valuation.

Defenders have largely chalked up the markdown to FUD, arguing that supporters of other “stablecoins” are launching a coordinated assault on tether, which has long dominated this market niche. However, billionaire investor and cryptocurrency bull Mike Novogratz says that USDT’s woes are the fault of its issuer’s lack of transparency.

tether price cryptocurrency
USDT/USD | Kraken | Source: TradingView

“I think Tether didn’t do a great job in terms of creating transparency,” said Novogratz on Wednesday at a conference in Frankfurt, according to a Bloomberg report. The former Fortress principal specifically called out Tether Limited, the token’s creator, for operating offshore and remaining cagey about its financial relationships, including with whom it is banking.

FREE CRYPTO COIN JUNKY HANDBOOK - 147 page guide covering Crypto Fundamentals, Beginners/Advanced Crypto Trading Strategies, Crypto Mining Techniques, ICO Investment strategies, and so much more.

CRYPTO TRADING STRATEGY GUIDES - Whether You're Day Trading, Swing Trading, Or Just Investing...Our Extensive Guides Will Get You To Where You Want To Be.

Tether is said to be currently banking at the Nassau-based Deltec Bank, where it opened an account after severing ties with the now-floundering Puerto Rican institution Noble Bank. Neither of these relationships has been confirmed publicly.

Concerned about the firm’s opacity, Novogratz said that he prefers some of the newer stablecoin options, particularly the Gemini Dollar (GUSD), which is issued by the cryptocurrency exchange founded by Cameron and Tyler Winklevoss. Unlike Tether, Gemini’s assets are housed in a U.S. correspondent bank, the Boston-based State Street. The stablecoin issuer, which received approval from the New York Department of Financial Services (NYFDS) to release the token, has also contracted with accounting firm BPM LLP to evaluate Gemini’s monthly attestation reports detailing that the token is always fully-backed by USD.

tether cryptocurrency market cap
Tether’s outstanding supply has shrunk by nearly $700 million in October. | Source: CoinMarketCap

“The concept of stablecoins make sense,” Novogratz said, explaining that they are ideal for transactional exchanges, unlike bitcoin, which he has referred to as “digital gold.”

However, competition within the stablecoin market is growing increasingly stiff. GUSD, along with “regulated” stablecoins Paxos Standard (PAX), TrueUSD (TUSD), and USD Coin (USDC), has been listed on a number of major exchanges in recent weeks. All of these tokens have consistently traded at a premium to tether, suggesting that, at least right now, the market trusts them more than USDT. Moreover, two of them — GUSD and USDC — have been added as settlement options on BitPay, which processed more than $1 billion worth of cryptocurrency payments last year.

In follow-up comments posted on Twitter, Novogratz stressed that he believed USDT is fully-backed by physical dollars and did not want to sow rumors about the token.

THE COMPLETE IDIOTS GUIDE TO MARGIN TRADING ON BITMEX - Beginner Strategies for Generating Consistent Profits with Margin Trading on Bitmex

TOP 3 BITCOIN CASINO & SPORTSBETTING SITES OF 2018 - Looking to Have a Little Fun with Your Crypto? Check Out the Latest & Most Innovative Crypto Gaming & Sportsbetting Sites on the Web

“Id like to put context to these quotes as the last thing I want to do is spread FUD. I said I thought tether has a dollar for every tether and that we actively traded it. The fact that almost $700mm has been redeemed in an orderly fashion is important.”

Nevertheless, he said that Tether must work harder to earn back lost trust and prove that its token should trade at its full $1.00 valuation.

Leave a Comment

Latest Crypto News

Beginners Review to Terrexa Cryptocurrency Exchange

Beginners Review to Terrexa Exchange

Terrexa is a new face on the scene, only operating since the first half of 2018, but it’s starting to create some interest. Based in Cyprus and backed by Prime Marshall CY, the exchange platform

CNBC Analyst Predicts Bitcoin Price Is ‘About To Explode Due to ETF Buzz

Bitcoin Breakout ‘Only a Matter of Time’

Bolstered by stable trading volume, growing network activity, and increasing validation on Wall Street, the bitcoin price could be on the brink of a major move to the upside. eToro senior market analyst Mati Greenspan

Sign Up Below!
Airdroppin the Latest Crypto News, Trading Strategies, Tools, & Reviews



1
Bitcoin
Bitcoin
$6,479.65
-0.10%
2
Ethereum
Ethereum
$204.42
0.05%
3
XRP
XRP
$0.4629
2.14%
4
Bitcoin Cash
Bitcoin Cash
$442.79
-1.15%
7
Litecoin
Litecoin
$52.582
0.48%
9
Cardano
Cardano
$0.074635
-1.85%
6
Stellar
Stellar
$0.2411
-0.22%
15
NEO
NEO
$16.621
-1.22%
5
EOS
EOS
$5.415
0.54%
12
IOTA
IOTA
$0.4941
0.51%

Crypto Guides & Tutorials

 Crypto Reviews

Subscribe to Our Social Media Daily Crypto Memes
Follow, Like, and Share Our Memes With The World


Pin It on Pinterest

Plus Free Crypto Trading Guides, Tutorials, Latest Crypto News,
and Altcoin Reviews. (Coming Soon: Pro Trading Signals)
SIGNUP FOR YOUR FREE
CRYPTO COIN JUNKY
HANDBOOK
DOWNLOAD NOW
We hate spam as much as you do. Unsubscribe anytime.
Plus Free Crypto Trading Guides, Tutorials,
Latest Crypto News, and Altcoin Reviews
(Coming Soon: Pro Trading Signals)
DOWNLOAD NOW
We hate spam as much as you do. Unsubscribe anytime.
SIGNUP FOR YOUR FREE
CRYPTO COIN JUNKY
HANDBOOK
Plus Free Crypto Trading Guides, Tutorials, Latest Crypto News,
and Altcoin Reviews. (Coming Soon: Pro Trading Signals)
SIGNUP FOR YOUR FREE
CRYPTO COIN JUNKY
HANDBOOK
DOWNLOAD NOW
We hate spam as much as you do. Unsubscribe anytime.
Plus Free Crypto Trading Guides, Tutorials,
Latest Crypto News, and Altcoin Reviews
(Coming Soon: Pro Trading Signals)
DOWNLOAD NOW
We hate spam as much as you do. Unsubscribe anytime.
SIGNUP FOR YOUR FREE
CRYPTO COIN JUNKY
HANDBOOK