Tether, the company that issues the dollar-linked coin tether(USDT) announced on Wednesday via Twitter that it has “redeemed a significant amount” of tokens from the circulating supply and will now “destroy” 500 million USDT from the Tether treasury wallet.
The tokens which were previously held in an account known as the “Tether treasury.” The past few weeks have seen massive influxes of USDT to the Treasury, particularly after the cryptocurrency lost parity with the U.S. dollar last week amid questions about Tether’s access to banking services. Usually, the value of the coin is stable almost at the same value as the US dollar.
This redemption is outlined by Tether in their white paper which states that each tether redeemed of issued corresponds to a deposit or withdrawal of funds into the firm’s bank account; in this case, a withdrawal.
According to the firm, this will leave 446 million USDT remaining in its treasury in preparation for future USDT issuances — meaning that those tokens redeemed and “burned” account for 52.8 percent of the total former supply.
Tether seemed to realize that the action would raise suspicions and questions amongst the cryptocurrency community as the cryptocurrency has taken a 29% beating over accusations of participating in unsavory trading practices with Bitfinex and suspicions of insolvency.