Binance CEO Voiced Concern Over Tether’s Potential Downfall
Binance is currently one of the largest holders of Tether. At the inquiry of Ran NeuNer of CryptoTrader, regarding the possible negative impact of Tether’s downfall on Binance, Zhao said that the situation is definitely of concerning and that’s why the exchange started listing other stable coins.
“We have seen fiat currencies go down in history a lot. Probably more times than they have been in cryptocurrencies. So yes, the concern is always there and that’s also why we’re listing other stable coins as well, so we actively promote other stable coins including the TrueUSD, …and others.”
When Binance listed TrueUSD they paired it with Tether to offer the latter’s holders an option to which they can easily switch to.
While there are worries regarding the collateral damage Binance will possibly have to sustain, the CEO, also discussed with the Bitfinex team. He also said to Ran NeuNer that:
“…I haven’t personally seen their bank accounts but, from a logical point of view… They have so many profits from their regular exchange business, they don’t need to do anything crazy about the Tethering. I think the reason they cannot release their bank account details is because if they release whichever bank they’re using, then the bank account gets shut down.”
The issues surrounding Tether surfaced when both Bitfinex and Tether became deeply involved in controversies regarding Bitcoin price manipulation. Two researchers from the University of Texas at Austin that the Bitcoin prices were manipulated in December when it reached its record high of $20,000.
The report which was titled “Is Bitcoin Really Un-Tethered? “claimed that Bitfinex might have used the Tether it owned to create a fake demand for bitcoin, by buying and keeping the price up while it dropped on other exchanges. The paper showed that if more Tether was released on the market, the higher its price would go, “similar to the inflationary effect of printing additional money.”