Tron made headlines this week with their upcoming partnership with Tether which it is said will bring the company further gains in their ecosystem and the space on a whole.
As Tether is apparently backed by USDT and pegged to the US dollar, it is thought that new TRC20-based USDT token will broaden the network’s capabilities, enabling interoperability for Tron-based DApps and protocols, according to a press release shared with The Daily Hodl.
On the surface the partnership seems a match made in heaven, yet a closer inspection of both Tether and Tron reveals a much darker and nefarious truth about the companies that have been far from upfront and tustworthy in their lifespans.
Take Tron for example, the founder Justin Sun has consistently batted away question marks over dodgy dealings and plagarism claims. A year ago, a Reddit post alleged that Justin Sun sold billions of TRX tokens, leading to FUD and a dip in TRX price. Not only that, Tron has often been said to have stolen much of their technological development from Ethereum after they split away from the group last year, something that was highlighted in the recent report by TokenGazer which was reviewed by Asia Crypto Today this week. Even their Whitepaper was said to be plagarizied.
Tether has also come under fire repeatedly for their price manipulation tactics. Bloomberg, made accusations that tether pricing was manipulated on the Kraken exchange. The evidence included small orders moving the price as much as larger orders, and “oddly specific order sizes—many going out to five decimal points, with some repeating frequently.” These oddly sized orders might have been used to signal wash trades in automated trading programs, according to New York University Professor Rosa Abrantes-Metz and former Federal Reserve bank examiner Mark Williams. Researchers John M. Griffin and Amin Shams in 2018 made similar assertions in their paper, “Is Bitcoin Really Un-Tethered?”
Not only that, rumors have continued to swirl around the company with regards to their dollar reserves or lack thereof. Various audits have been curtailed or seemed dubious, Freeh, Sporkin & Sullivan LLP (FSS) which appeared to confirm that the issued tethers were fully backed by dollars. However, FSS stated:
“FSS is not an accounting firm and did not perform the above review and confirmations using Generally Accepted Accounting Principles,” and “The above confirmation of bank and tether balances should not be construed as the results of an audit and were not conducted in accordance with Generally Accepted Auditing Standards.”
These accusations have put Tether in problems within the US. During the course of a price manipulation investigation by the U.S. Commodity Futures Trading Commission and the United States Department of Justice, Phil Potter, Chief Strategy Officer of Bitfinex and an executive of Tether Limited, left Bitfinex in 2018. The investigation was continuing on November 20, 2018 and focusing on Tether and Bitfinex, according to Bloomberg.
Overall, it seems that both companies have murky pasts and are yet to fully account for these claims although they have strongly denied them subsequently. That is not to say that both have not been highly successful despite this. However, many in the space will approach both and view this partnership with caution.