More and more people in the industry are losing faith in the dominant stablecoin in the industry, Tether (USDT). Yesterday, Bitfinex warned its users that there is a damage to the Tether ecosystem causing even more decline in social sentiment. Bitfinex is still recording suspicious fiat deposits leaving users worried especially since it has been having issues with Tether. Bitfinex has been having issues with the banking sector after it got ditched by its banking service provider, HSBC. Right now, it is banking under a private account with a bank of communications that is based in Hong Kong. Citibank is serving as it’s intermediary bank.
What HSBC Relationship Termination Caused Bitfinex
After HSBC terminated its relationship with Bitfinex, all fiat deposits were paused temporarily. However, this hasn’t been confirmed and is just based on speculations. One thing that is sure is that the change led to creation of a new system that is supposed to be new and improved according to Bitfinex. This new method of depositing fiat requires that users hold at least $1000 in equities. They are also expected to undergo a new account review that would last for about 48 hours. After this, users will receive a deposit notification with specific details for the transaction.
Before trying to make any deposits, users have been advised to take precautions. The post from Bitfinex warning users is as follows:
“The banking information herein is confidential and commercially sensitive. It’s important that you take care while handling this information. We encourage you not to share this information with another else. Only your financial institution should have the information. This is because this information can be used to cause damage to Bitfinex and to you if it falls into the wrong hands. It can also damage the entire token ecosystem. Keep in mind that there will be consequences if this information is shared to the public”.
According to the blog post, Bitfinex claims that they are having issues with fiat deposits because of their competitors. A part of the post is as follows:
“We think this system is way more durable when it comes to facing sustained attacks from competitors and their supporters. All the campaigns that have been launched against us will only make us better and stronger.”
Investors Lose Faith In Tether (USDT)
The last few weeks haven’t been the best for Bitfinex. The major cryptocurrency trading exchange is fighting a war on different fronts. While it’s credibility is being questioned by critics because of recent events, Tether is losing the backing of investors. Investors are starting to lose faith in Tether as they buy other stablecoins. The good thing is that even if the Tether has lost its USD peg, it is still the second most traded coin in the space. This is also a disadvantage because it means that the entire market will suffer greatly if the coin should fail totally.
Tether (USDT) Price Today – USDT / USD
Still struggling to regain its USD peg, Tether is trading at $0.971683. This indicates that it is down by 0.20% against the USD. Against Bitcoin, it is up by 0.44. The trading volume over a 24 hour period is $2,563,773,302 and the market capitalization is $2,143,942,380.