There have been quite a lot happening in the Tether (USDT) world recently. A subpoena from the United States Commodity Futures Trading Commission (CFTC), received on the 6th December, for example. The reasons behind it aren’t known until today.
What we do know, is that the total volume of USDT in circulation increased by nearly 9000% since February 2017. This means a rise from roughly $25 million in February last year, to over $2,25 billion at the end of last January (according to Coinmarketcap). What is particularly interesting, is the growth of USDT by 775 million since the subpoena was received.
This shows an increase of 52.5% in the total supply since December 6th 2017.
The sudden issuance of so many USDT, fuelled speculation on the legitimacy and possible insider trading. Tether’s promise is to keep USDT at a ratio of 1:1 with the USD, while holding an equal supply of fiat currency.
Many sources now claim that tokens issued since the subpoena was received, were not backed by USD and traded on various exchanges in an attempt to drive the price up BEFORE the subpoena’s existence was revealed.
Not the first time
This isn’t the first accusation of insider trading by Bitfinex, an exchange closely affiliated with Tether. An email by an apparently disgruntled former employee surfaced in 2013, suggesting that Bitfinex’s Chief Financial Director at the time, “was credited one million dollars, money that he didn’t have deposited in his account.”
In a comment regarding the recent subpoena, Bitfinex and Tether claims: “We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests.”