USDT hearing, focusing on how far it is from the principle of digital currency

Today, on July 29th, US time, the New York Attorney General's Office (NYAG) will hold a hearing on Tether. The legendary "USDT Thunder" is a reality, is there more thunder, Tether and Bitfinex will Where to go, will have an impact on the entire digital currency market. This will have a certain impact on the direction of the digital currency market.

The reason is that USDT is the bridge connecting the world of encrypted digital currency and legal currency. It is one of the major currencies that most holders will handle or hold. Despite the rise of various stable currency projects in 2018, USDT still became the first place with a market share of 97.6%. The impact of USDT on the entire encryption market cannot be ignored. According to statistics, every additional increase and change of USDT has brought huge fluctuations in the price of Bitcoin. The Tether hearing, the focus is to let the people see how far the digital money market is now deviating from the original intention of the original designer.

The USDT was heard, not the bones in the egg.

Prior to this, NYAG had already issued various allegations against Bitfinex and Tether: whether to provide services to users in the US or New York State, loss of $850 million, questioning the Tether reserve, lack of transparency, suspected fraud, misappropriation of funds, illegal provision of investment products And put forward a series of measures such as the ban.

Public opinion seems to have been verified against various allegations of NYAG. According to CoinTelegraph, Bitfinex and Tether deceive customers by making up $850 million in losses. But this information happens to need to be further verified at this hearing.

Some people also summed up the four sins of USDT: First, non-compliance: USDT's issuing company Tether was renamed by Realcoin, a company registered in the Isle of Man and Hong Kong. Since USDT's bank account is not located in the US, USDT is not in Within the US financial regulatory system, it is also unable to support US residents to directly use US dollar bank accounts for operations. It can only rely on Bitfinex that has obtained FinCEN license to complete the US dollar deposit and withdrawal. The person in charge of the WOEX exchange, which supports strong supervision in the industry, said that as a centralized stable currency that is not regulated by the government, it is actually a non-compliant stable currency.

Second, opaque: USDT is a legal currency linked to legal tender issued by Tether. It can be issued under the Omni Agreement, TRC-20 or ERC, allowing users to redeem/redeem Tethers into legal tender or other terms based on Tether Limited's Terms of Service. Encrypt digital currency. The birth of the USDT is accompanied by a promise: strict compliance with the 1:1 margin system, that is, for every USDT token issued, the account will be increased by one dollar. However, during the entire development of the USDT, its issuing company Tether bank account information has never been disclosed, and a credible audit report has never been published to prove that it has a corresponding dollar reserve. Tether's chief legal counsel, Stuart Hoegner, pointed out that as of April 30, the company had cash and cash equivalents (short-term securities) on hand, totaling about $2.1 billion, accounting for about 74% of the current USDT total (based on USDT resource manager data). Look, there are currently $2.8 billion in tokens on the market.)

Third, random issuance: USDT issuer Tether's US dollar reserve and reserve bank are still a question. For investors, this has always been a fearful “thunder” on USDT, but doubts have never affected Tether’s continued “printing”. At around 8:00 on July 14, Tether Treasury issued a total of 5.05 billion USDT in one hour and destroyed a total of 5 billion USDT twice, all on the wave field chain. In response, Bitfinex and Tether Chief Technology Officer Paolo Ardoino have responded on Twitter, saying that this is a problem with data tags from Omni to TronTether.

Fourth, instability: As the most mainstream stable currency, USDT has always been regarded as the first choice for hedging. Although the USDT will not return to zero within a short period of time, if there is a huge risk of a run, the credit mechanism is lost, and the price may drop significantly. In October 2018, the USDT had a market capitalization of $2.7 billion. At that time, the media reported that the USDT mortgage assets were opaque and the market capitalization was greater than the actual asset reserve. Coupled with a series of factors such as the insolvency of the USDT custodian bank, it was attacked by various media. Bloomberg issued a statement saying that once any evidence of Tether’s wrongdoing was discovered, the USDT price collapsed as soon as the report was released, with a short-term decline of 11%. Similar incidents, as well as the fall in USDT prices in May this year.

At present, the most used USDT is the Chinese trading platform, and the lowest proportion is the US trading platform. Obviously, the true source of USDT's circulation and value recognition is “consensus” rather than trust. Although the USDT is not regulated, randomly issued, and the amount of funds in the Tether account is insufficient, the bank account information is not disclosed, and a credible audit report has never been published to prove that it has the corresponding US dollar reserve. Some core information is not willing to disclose it. Questioned and so on, but after several years of development, USDT has become the stable currency with the largest market share and the highest support on the trading platform. Approximately $3.7 billion is currently concentrated on the USDT, but market demand remains high. In contrast, the size of other stable currencies and the USDT are almost inconsistent. For example, Circle and Coinbase have a US dollar stable market value of only $400 million, TrueUSD is $220 million, and Paxos is $176 million, while Cameron Winklevoss and Tyler Winklevoss The stable currency GUSD issued by the brothers is the most "poor", only $8.4 million.

The most important thing is that other stable coins are much better than the USDT. This is the nature of human "bad". This is also the root of the original intention of people in the practical application.

After the USDT hearing, the impact of losing the case

The New York Attorney General's Office (NYAG) will hold a hearing on Tether, and the court will decide on the same day as soon as possible. Under New York State law, once Tether and Bitfinex lose, they will have to pay a fine and close their business in New York. Even if exchange rate fluctuations occur, it will be less than the first two times, and will return to normal levels more quickly. Since Tether and Bitfinex are not registered in New York, the laws of New York are not regulated in other regions. Some experts predict, but what may happen is that "the first is that the hearing may explode other black materials of Tether or Bitfinex, causing market worries and shocking the exchange rate. The "depreciation" caused by the two "violent thunders" is still very The second is the long-term concern that USDT has long been unpublished, and the previous 850 million US dollars was confiscated or frozen by Polish, Portuguese, and US government authorities. It also reveals that Tether’s biggest hidden mine is that funds are opaque and Obtained approval from the regulator. Freezing the account or confiscation of funds is tantamount to paying the bottom of the fund. The USDT without the reserve is just a string of codes.

The USDT hearing, the real point of view is how far it goes from the principle

After the USDT hearing, the impact of losing the case is far more realistic than the analysis by the experts. Looking back at the origin and development history of digital currency, we can see how far the digital currency market is moving from the right direction. Since the birth of Bitcoin in 2008, according to its white paper and the actual operation of Bitcoin, he is a digital currency based on the information society, using information technology to self-develop and self-develop, and does not need to interface with traditional finance. . It is only in the initial stage of the specific application of scale and affairs, and it is difficult to deal with specific applications in the real society. Then, people's opportunities to participate in digital currency have come, but they have also begun to show their true nature in digital currency. The unscrupulous means of making money and profiting further highlights the "evil" of human beings. For example, the people develop computers for the convenience of people's calculations and information transmission, but the other side of humanity's "evil" began to develop computer "viruses" on the computer, and hackers steal "digital currency" incidents.

Human "evil" is on the digital currency, and recent manifestations have emerged one after another. Some are in the name of digital currency, develop digital currency based on the traditional world, and even develop fake digital coins, "air coins", used to swindle money to run, and like "cutting leeks" one after another. The development of new things, inevitably there are some small setbacks in the growth, but the USDT event is somewhat different, it is an important part of the connection between digital currency and traditional legal currency. With USDT's existing market share, it directly affects the width of the digital currency docking in the real world and affects the people's acceptance of digital currency.

Since the origin of digital currency, it is based on the existence of a set of its own operating rules system in the information society. It has its own development direction and trajectory. At the same time, it is the influence and intervention of abandoning people's "evil". Otherwise, it will be generated for the entire digital currency. The blow is self-evident and will definitely affect the development of digital currency.

The USDT hearing will be held soon, and it is entirely speculative that Tether or Bitfinex must have a "bad" original sin, even if it is not shown at this USDT hearing. But from this hearing, to see how biased the USDT is, we know how far the entire digital currency is now. Whether Tether can adjust back to the original track in time is not only a matter of Tether itself, but also a reference adjustment for the entire digital currency market. Apply a buzzword: don't forget your heart, remember your mission. This will have the future of the right digital currency market.