The controversy surrounding Tether and Bitfinex has continued to curtail efforts to take the Tether stablecoin (USDT) to the masses. TRON has announced that it will halt the planned $20 million incentives program to promote a version of USDT issued on the TRON blockchain.
In a tweet, TRON’s CEO, Justin Sun, said:
“I’ve decided to postpone our USDT rewards programs for the future updates until there’s more clarity regarding Bitfinex and Tether.”
Before the controversies arose, the blockchain platform was planning to use major crypto exchanges like OKEx and Huobi to give free TRON-based USDT coins to users in an airdrop. The airdrop was also a way to build confidence for holders to transfer their Tether coins to TRON from the Omni protocol where they were issued.
Tether Ltd, the issuers of the Tether stablecoin, has over the years maintained the USDT has a 1:1 ratio with the U.S dollar. While its trading has tried to hold this ratio, there have always been concerns of the 1:1 USD backing. Tether Ltd has also never allowed a professional third-party audit firm to confirm the USD backing claims.
Recently, Tether’s general counsel, Stuart Hoegner, admitted through an affidavit that USDT only has 74 percent backing against cash and equivalents.
Further throwing USDT off the trails of remaining the number one stablecoin is CoinFlip’s recent announcement. CoinFlip was in high gear to enable the purchase of TRON-based USDT from its over 180 cryptocurrency ATMs. The ATMs are dotted across the U.S in gas stations, tobacco and convenience shops.
According to CoinFlip’s CEO, Daniel Polotsky, the plans will be shelved “until the smoke clears.”
“We want to make sure Tether and Bitfinex are operating 100% lawfully before offering their products to our customers.”
The New York Attorney General, Letitia James has accused Bitfinex of using Tether’s reserves to cover an $850 million hole in its balance sheet without informing its clients.