Puerto Rican Noble Bank, which, presumably, serves Tether, was threatened with closure. According to the sources of Modern Consensus blog, the bank could not find financing. The administration of the bank tried to find financial support from one of the large Tether coin holders, but the requests were not satisfied.
According to one source, the bank has a few days left to receive the necessary money. What amount of funds the bank needs to find is not specified.
Modern Consensus adds that there are problems with Tether itself. An interlocutor of the blog from a large crypto-bureau reported that one of the stablecoin holders was trying to sell "tens of millions of Tether", but did not find anybody interested in the offer.
The research department of the BitMEX platform has reported that Noble Bank will start serving Tether accounts in March. Analysts noted the connection between the growth in the size of its deposits and a volume increase in the issue of USD₮.
In May, evidence was published linking Noble Bank and Bitfinex.
Problems of Puerto Rican bank can create repercussions in the cryptocurrency markets. Tether was repeatedly accused of manipulating bitcoin rates and was suspected of untruthful statements that the company's coin was supported by the US dollar. At the end of 2017, the U.S. Commodity Futures Trading Commission (CFTC) sent subpoenas to Bitfinex cryptocurrency exchange and to Tether token issuer. As it was reported by Bloomberg, the head of both companies turned out to be the same person.
In June, the researchers from the University of Texas in Austin conducted a study demonstrating that Tether is used to support Bitcoin.
A stable relationship between the increase in Tether's supply (USD₮) and the increase in the price of Bitcoin made scientists run a comparative analysis of Bitcoin and Tether blockchains.
It revealed that the entities associated with the Bitfinex exchange used the USDT to buy Bitcoin during the periods of depreciation. Such price-supporting activities have worked, as the price of Bitcoin grew after such intervention.
To make a significant impact on the Bitcoin price it is enough to change the Tether offer by only 1%, the researchers stated. Tether is created, moved to Bitfinex, and then slowly flows to other cryptocurrency exchanges – mainly to Poloniex and Bittrex. The only major exchange where Tether can be exchanged for the U.S. dollar is Kraken, but the number of such transactions is small, the study says.
The last big USD₮ token injection to the market was made in the middle of August this year. 50 million worth of Tethers were flooded. At the end of June, the company issued tokens for $250 million, entering the top-10 largest cryptocurrencies. Before that, another 250 million USD₮ were "printed" in May. Another market injection ended with 300 million USD₮ that appeared in March. More than a third of all Tether coins went into circulation during the period from December 6, 2017, to January 23 of this year.
The account run by a person behind the exposed Tether/Bitfinex issue couldn’t stay away from commenting on the situation calling for the audits since 2017 to be unveiled by the bank.
In June the company has finally presented an audit report aimed to prove their bank accounts are capable to back USD₮. However, the report has been compiled by Freeh Sporkin & Sullivan, LLP (FSS), a law firm, not an auditor, so it can not be considered a full-fledged document.
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