Major crypto exchange Bitfinex, has reportedly been sending huge amounts of Tether (USDT) tokens to cold storage vaults. Bitfinex, has the same CEO of Tether and is the main link of the company in the crypto market.
Tether which has been accused of sourcing USDT tokens to Bitfinex without actually backing them with physical USD has denied these rumors of foul play several times.
The whole case is based on the fact that Bifinex’s page on CoinMarketCap lists the USDT/USD trading pair. This is the trading pair with the second highest volume in the exchange over the past 24 hours (nearly $48 million USD).
Tether’s USDT token appears to be losing its peg to the USD as it had dropped to its all-time low of $.85 on Kraken. At press time, USDT is trading at around $0.9874 – which suggests that investors might be losing confidence in Tether’s claim that it has enough USD reserves to back its stablecoin.
There is no clear reason to why Bitfinex is offloading its USDT holdings. However, some reports suggest that Tether is planning to move out of stablecoin business while buying back its own tokens in profit.