Tether has admitted to using asset reserves to invest in Bitcoin, meaning that it has not consistently maintained its 1:1 USD peg, strongly misleading its investors. This latest revelation to emerge in Bitfinex’s battle with the New York Attorney General’s office adds to the growing uncertainty, instability, and lack of transparency increasingly associated with Tether.
Matt Branton, CTO of Neutral and architect of Neutral Dollar, a next-generation stablecoin pegged to a basket of four live stablecoins for increased stability, liquidity, and transparency, has weighed in on the matter.
Matt Branton, CTO of Neutral and architect of Neutral Dollar, said:
“The news that Tether used asset reserves to invest in Bitcoin should not come as a complete surprise. Tether’s lack of transparency and auditing had always been in question by members of the crypto community for quite some time. The misuse of reserves by any stablecoin project, which disguises itself as storing such funds to keep its peg, goes against the very proposition a stablecoin is trying to uphold – which is very dangerous for the wider stablecoin market. Stablecoins have the potential to bridge the gap between traditional and digital economies — a potential which will never be reached unless we cease to support bad actors and behaviors. This attitude has resulted in investors and the broader community being continuously misled, as well as a negative stigma culminating from people interested in crypto but have still been at the sidelines. While Tether may hold market dominance, we can only hope that this will steadily decrease for more legitimate stablecoin projects to come into play.”
Neutral, founded in 2018, is a smart contract system offering superior financial instruments to the cryptocurrency space. Leveraging proven investment concepts, Neutral builds upon existing infrastructure to facilitate growth in the cryptocurrency and blockchain industry. Neutral’s first product, Neutral Dollar (NUSD), is an aggregated basket of stablecoins, resulting in a superior digital dollar which has lower volatility, increased liquidity, and increased transparency when compared to other stablecoins on the market. Neutral’s core team comprises of experienced investors, quantitative traders, trading system developers, and is advised by Nobel Prize economists and financial industry experts. The company is backed by Sequoia Capital China and has offices in San Francisco, New York, and Beijing.
For more information, visit https://www.neutralproject.com/