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Tether Tokens Are Fully Backed According to an Insurance Company

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Tether Holdings Limited, the company behind Tether (USDT), has published a testimony yesterday from an insurance company that claims the stablecoin is “fully backed” but without disclosing what kind of assets are backing up the currency.

Moore Cayman, an insurance company located in the Cayman Islands, testified for Tether, stating that the stablecoin is fully backed with undisclosed reserves. The document examines several aspects of Tether, indicating that its consolidated assets exceed its consolidated liabilities. 

As of February 28, 2021, Tether holdings accounted for $35.28 billion in total assets exceeding its total liabilities of $35.15 million.

“Tether has always been fully backed, and the assurance opinion we made available today confirms it once again. As Tether’s growth in the market continues to validate our business, we understand the public’s interest in this matter and are pleased to share this attestation as part of our ongoing commitment to transparency.” — claims the report.

The Community Wants a Proper Audit

While the document claims that Tether has more than enough USDT reserves, this has raised concerns (and critics as well) about the transparency of Tether —and whether or not they are fully backed by US dollars. The stablecoin is one of the most vital currencies in the crypto market. 

The problem is an attestation is not the same as an audit, and Moore Cayman is not a formally recognized auditing body. Tether has not been audited by an auditing firm like Deloitte or PwC (PricewaterhouseCoopers). As such, the insurance is not part of the reporting requirement in the State of New York.


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An audit is made by expert analysts in blockchain to ensure a protocol is clear from potential risk in all of its components. On the other hand, an attestation only evaluates how accurate is the data being examined by an auditor.

Tether plans to issue another attestation, followed by quarterly attestations as well. Some critics in the crypto-community have stated that attestations will only remain as such and will never provide the proper security an audit does.

Tether was also subject to a ransom demand for 500 BTC, around $29,500,000. As reported by CryptoPotato, the sender threatened the company to leak “harmful” documents that could destabilize the crypto market.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/tether-tokens-are-fully-backed-according-to-an-insurance-company/

Blockchain

$420M in leveraged long traders liquidated after XRP rallies to $1.96

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XRP holders couldn’t have asked for a better year as the cryptocurrency rallied almost 800% and flirted with a $2 level in the early hours of April 14. 

In addition to achieving its highest level since January 2018, this robust price increase signals that investors are not worried about the ongoing SEC “unregistered securities offering” dispute.

However, just 6 hours after rallying to $1.96, XRP price crashed by more than 20%. During an interview, DCG Group CEO Barry Silbert said it would be risky for exchanges and companies in the United States to relist XRP ahead of receiving the SEC’s blessing. These remarks may have contributed to the unprecedented $420 million long liquidations on derivatives exchanges today.

XRP price in USDT at Binance. Source: TradingView

Over the past couple of weeks, the primary catalysts for XRP’s rally have been victories in Ripple’s legal battles. Lawyers representing Ripple were granted access to internal SEC discussions regarding cryptocurrencies, and more recently, a court denied the disclosure of two Ripple executives’ financial records, including CEO Brad Garlinghouse.

Considering the recent rally, pinpointing a single reason for the price correction will likely be inaccurate. Nevertheless, the impressive $420 million long liquidations past 24-hours exceed those of Feb. 1 when XRP price crashed by 46% in two hours.

XRP futures aggregate liquidations. Source: Bybt

The only logical reason behind this staggering liquidation is excessive leverage used by buyers. To confirm such a thesis, one must analyze the perpetual contracts funding rate. To balance their risks, exchanges will charge either longs or shorts depending on how much leverage each side is demanding.

XRP perpetual futures 8-hour funding rate. Source: Bybt

The chart above shows that the 8-hour funding rate is surpassing 0.25%, which is equivalent to 5.4% per week. Although this is excessive, buyers will withstand these fees during strong price rallies. For example, the current upward price move lasted for almost three weeks, and prior to that another took place in early February.

Blaming the liquidations exclusively on leverage seems a bit extreme, although it certainly played its part in amplifying today’s correction.

Moreover, the record growth in XRP futures open interest was accompanied by a hike in the volume at spot exchanges. As a result, the eventual impact from more significant liquidations should have been absorbed by the increased liquidity.

Cascading liquidations will always take place in volatile markets. Thus investors should focus on how long it takes until the price recovers from it.

Fundamentally, a 10% or 20% intraday drop should not be interpreted differently. The correction depends on how many bids were previously stacked at exchange orderbooks and is not directly related to investors’ bullish or bearish sentiment.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/420m-in-leveraged-long-traders-liquidated-after-xrp-rallies-to-1-96

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Garry Tan’s 2013 investment of $300K in Coinbase is now worth $2.4B

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Garry Tan, a prominent angel investor and the founder of Initialized Capital, was one of the first investors to provide seed funding to Coinbase eight years ago. 

Less than a decade later, and after today’s highly anticipated Nasdaq listing for Coinbase’s COIN stock, Tan’s 2013 investment of $300,000 into Coinbase is now worth $2.4 billion.

Coinbase debuted on the Nasdaq on April 14 at $381 per share, making it one of the most hyped listings in the U.S. stock market of the year.

How did $300,000 become $2.4 billion?

In 2013, when Tan invested in Coinbase, it was unclear whether Bitcoin would be recognized as a global asset and an established store of value.

At the time, there were not many reputable exchanges, and the few that existed were often hacked. Tan’s investment took place before the monumental Mt. Gox hack that saw billions of dollars worth of BTC stolen.

Even after launch, Coinbase was not always in an uptrend. According to Coinbase co-founder Fred Ehrsam, from 2014 to 2017 the company faced numerous hardships. 

Ehrsam said:

“Over time, crypto grew, and so did the company. A simple #Bitcoin wallet evolved into individual and institutional products to support a blossoming cryptoeconomy. 2 nerds who met on the internet (yes, @brian_armstrong and I met on @reddit ) turned into a company of 1000+. There was serious hardship. In the 3 years between 2014 and 2017, the outside world thought crypto was dead. Over a third of employees left. Yet crypto kept building. @ethereum came on the scene and showed that crypto native applications were possible, opening up a whole new world of possibilities.”

Even if the listing fails to impress, Coinbase has alluring financials

Coinbase is the first publicly listed major cryptocurrency exchange in the U.S. stock market and its availability on Nasdaq now provides mainstream investors with exposure to the crypto sector. Even if the listing fails to impress on day one, the company still has strong financials and user metrics.

Coinbase made $1 billion in the last quarter and has more users than every financial institution in the U.S. apart from JPMorgan, making it a highly compelling trade for investors in the traditional financial market.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/garry-tan-s-2013-investment-of-300k-in-coinbase-is-now-worth-2-4b

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German software developer donated $1.2M in ‘undeserved’ Bitcoin to political party

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A German national who reportedly sees his Bitcoin profits as “undeserved wealth” has donated more than $1 million to the country’s green political party.

According to Hamburg-based news outlet Die Zeit, Moritz Schmidt, a software developer from the northeastern town of Greifswald, has sent one million euro — roughly $1.2 million — to Germany’s green party, known as The Greens or Alliance 90. A party spokesperson said Schmidt had made significant gains during the Bitcoin (BTC) bull run but wanted to contribute to causes related to environmental and climate protection rather than HODLing his crypto.

“The donor has made it clear to us that he sees these profits as undeserved wealth that he does not claim for himself, but wants to use socially, for something that corresponds to his convictions,” said the Greens spokesperson. “In the meantime he sees the Bitcoin system critically, among other things against the background that the necessary arithmetic operations consume huge amounts of electricity.”

Records for the Greens show that Schmidt’s donation is the biggest the party has received this year, with the next highest contribution at 500,000 euro, or roughly $600,000. The funds will reportedly be used for the party’s federal election campaign and the state election campaigns in 2021.

The software developer is not alone in seemingly hoping the crypto industry will become greener. Many have criticized Bitcoin mining for its impact on the environment, with some estimates indicating the network consumes more energy than the entire country of Argentina. However, Mike Colyer, CEO of crypto mining firm Foundry Digital, said this week that he believes mining Bitcoin could eventually help the transition to a “world where 100% of our energy is produced from renewables.”

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/german-software-developer-donated-1-2m-in-undeserved-bitcoin-to-political-party

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