Bitfinex CTO plays down reports that Tether was in trouble

Bitfinex’s Chief Technology Officer Phil Potter said the exchange has been doing well, despite reports that Tether was in trouble. He also predicted big announcements from crypto companies this year on “the huge potential” of blockchain and cryptocurrencies.,

The “Tether was in trouble” is a report that has been making rounds for quite some time. However, the CTO of Bitfinex plays down these claims saying that Tether is not centralized.

Bitfinex CTO Paolo Ardoino downplayed allegations that Tether was in jeopardy during a Twitter Spaces debate on May 12. USDT showed hints of de-pegging in the early hours of May 12, with a price as low as During a Twitter Spaces conversation on May 12, Bitfinex CTO Paolo Ardoino dismissed reports that Tether was in trouble. In the early hours of May 12, USDT had shown signs of de-pegging, as its price dipped as low as $0.9410..9410.

USDT/USD data from TradingView.com

With markets still grieving from the loss of the $1 peg for Terra UST, a similar event for Tether might have triggered a crypto ice age.

Tether is the industry’s largest stablecoin by market size and most paired, implying that USDT handles the bulk of crypto market liquidity.

Critics claim that recent occurrences have shown the vulnerability of private stablecoins. Authorities claim stronger controls on stablecoins are on the way, after the loss of billions in the UST disaster.

Tether has recovered.

Despite the turmoil, Ardoino tried to calm investors by declaring, “The peg was not broken.” He was referring to the company’s capacity to redeem tokens rather than its exchange price.

USDT holders may exchange their tokens for $1 each on the Tether website. Despite falling exchange rates, token holders may still pay out at face value, minus verification and withdrawal costs.

Ardoino said that on May 12, the company has adequate liquidity to easily redeem $600 million in USDT. A broken peg refers to the inability to redeem USDT tokens at face value since it is a fiat-backed stablecoin.

“It would have been ruined if Tether had not honored the $1 redemption.”

The price of USDT shot up shortly after the Spaces chat finished, closing the day at Soon after the Spaces conversation ended, the price of USDT wicked upwards to close the day at $0.9955, much to the relief of the crypto community..9955, much to the relief of the crypto community.

The tragedy put investors’ nerves to the test, which were already frazzled after the loss of billions via the Terra ecosystem.

The attention is on stablecoins.

In a live panel discussion held by the Official Monetary and Financial Institutions Forum, SEC Commissioner Hester Peirce commented on the topic, saying that this week’s events have pushed regulators to sit up and pay closer attention to stablecoins.

Peirce did not elaborate on what this would imply, simply that any prospective legislation should allow for a “trial and error” approach.

“There are a variety of approaches to addressing stablecoins… We also need to provide space for failure when it comes to experimenting.”

Tether, Stablecoins, Tether