With its parent company, iFinex, registered in the British Virgin Islands, Tether has a couple dozen employees scattered around the world, according to LinkedIn. (According to Bloomberg, the company is using its reserve assets to make various market bets and investments, details of which are mostly unknown.) The coin’s alleged use in manipulating the price of Bitcoin has been closely studied one of the academics examining Tether has been advising federal agencies for years on cryptocurrency investigations. The recent blockbuster investigation in Bloomberg Businessweek memorably described Tether as “practically quilted out of red flags.” The company has been compared to an unlicensed shadow bank and an offshore hedge fund. Already, reporting and investigations into the company have accused executives of Tether Limited and its sister exchange Bitfinex of shuffling money between accounts to fool banks and regulators, as the Commodity Futures Trading Commission said last week in a settlement, and losing hundreds of millions of dollars in various hacks and soured business deals, as the cryptocurrency press has relentlessly documented. If Tether were to somehow collapse or face a major regulatory crackdown, market liquidity would likely dry up, and a lot of people could lose a lot of money. It is also tremendously important in China’s informal financial sector, facilitating capital flight out of the country. Although Tether is pegged to $1, its value can fluctuate by a few cents across exchanges, allowing savvy traders to make quick profits by buying up discounted Tethers and selling them for $1 elsewhere. It’s a vehicle for everyday transactions and sophisticated high-frequency trading. Crypto prices are frequently listed in terms of Tethers, which can be purchased on most major exchanges. The reason this matters is that Tether is one of the primary engines driving the crypto economy, enabling all kinds of transactions and arbitrage opportunities. But it’s hard to know for sure: The company has never produced an audit, though earlier this year, Tether released an “attestation” from a Cayman Islands firm that said the company had about 3 percent of its reserves in cash subsequent releases have claimed that the company has about 10 percent in “cash & bank deposits.” government officials-seem to think there may be less than $69 billion of fiat cash underwriting all those Tethers. A lot of informed industry observers-and some U.S. Each Tether (or USDT) is pegged at $1, and there are approximately 69 billion Tethers in circulation.
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