CTO of Tether Sounds Alarm over USDT Manipulation
Tether and Bitfinex chief technology officer Paolo Ardoino has made claims of possible manipulation of the USDT (USDT) stablecoin’s price. In an August 3 tweet, Ardoino expressed concerns that USDT is being artificially pressed down by roughly 10 basis points, equivalent to a price reduction to about $0.99.
The Unexpected Situation with USDC and a New Competitor
Interestingly, rather than witnessing an expected rise for USDT’s main competitor, USDC, Ardoino noted that it was being heavily redeemed. Meanwhile, a new contender appears to be gaining significantly from the scenario. His sarcastic remark on the situation hinted at foul play: “Exactly! It feels definitely organic and not manipulative at all,” tweeted Ardoino.
A Possible Beneficiary: First Digital USD (FDUSD)
Stablecoin data leads to the speculation that Ardoino was referencing a new stablecoin called First Digital USD (FDUSD) in his tweet. Data from CoinMarketCap reveals a sudden surge in FDUSD’s market cap, from just $20.25 million on August 2 to a staggering $256.55 million, making it the sixth stablecoin by trading volume.
Market Forces at Play: The Role of Binance?
Adam Cochran, a financial analyst, further elucidated the situation in a Twitter thread. According to Cochran, many on-chain addresses are swapping USDT for DAI, and these addresses seem to be funded by an account with thousands of Ethereum (ETH) originating from Binance. Cochran further explained that these addresses seem to be purely focused on USDT transactions, suggesting an exertion of artificial market forces on the USDT.
Unraveling the USDT Manipulation Mystery
The swapping of USDT for DAI commenced about 100 days ago. Cochran opined that it might be the exchange itself, referencing continuous spoof phishing attacks targeting exchanges. While more concrete evidence is needed, Ardoino’s concern over potential USDT manipulation could prompt a closer examination of the market dynamics surrounding stablecoins.
