The US Senate Committee on Banking, Housing and Urban has sent a letter.stablecoin “ On Tuesday, the issuer asked for an explanation of how the company works and the “Mints” teaser that can be exchanged for different types of cryptocurrencies, such as Bitcoin. Why does it matter? Because some people believe that Tether is not the only one cheating, they are worried that Tether’s potential collapse could lead to the collapse of the entire cryptocurrency market with a digital version of the currency.
Tether’s letter, addressed to CEO Jean-Louis van der Velde, was led by Sherd Brown, a Democrat senator from Ohio, who expressed concern that “stablecoin presents investors with security risks and raises concerns about market integrity.” This is a very polite way to say incredibly Sketch art It’s too big for the breech.
Like stablecoins Teethers are pegged to US dollars, and theoretically consumers could trade US জন্য 1 for a teaser. Why would anyone want to do that? Stablecoins are commonly used to exchange cryptocurrencies, which can be difficult to buy and often required. An intermediary currency.
As Bloomberg News reported October, Was 69 billion Tether in circulation, which means Tether as a company should have $ 69 billion or equivalent in U.S. currency. This number is $ 73 billion and growing. And it almost certainly doesn’t hold that much money.
If Tether really had so much to offer to the company, Making it one of the largest banks in the United States But The truth is that it is Probably not That means something deeply volatile is happening কিছু something that has the potential to disrupt cryptocurrency markets, large enough to potentially disrupt the traditional financial system.
“I have significant concerns about the non-standard terms applicable to the release of certain stablecoins, how those terms differ from traditional assets, and how those terms may not be consistent across digital asset trading platforms,” wrote Sen. Brown. Letter to Tether.
Brown’s letter has six questions:
- Please describe the initial purchase, exchange or minting process[es] Through which customers can earn teether in US dollars. In your answer, explain any relevant limitations or qualifications to be involved and complete in that process.
- Please explain the process of redeeming the teaser and getting US dollars. Here, too, mark any requirements or limits, including any minimum redemption size, waiting period or eligibility.
- Since Tether’s inception, how many Tether tokens have been issued and how many have been redeemed? In the last 12 months, what is the maximum percentage of teasers in circulation at the beginning of a calendar week to be redeemed in the next seven days?
- Briefly identify the characteristics of the market or operational conditions that will prevent the purchase, or redemption, of a tether or other digital asset for US dollars. To answer this question, do not list or describe the legal or regulatory limitations currently described in the User Agreement or Terms of Service. For each of the conditions identified, please provide at least one example of what happened in the last 12 months and its duration.
- Please identify any trading platforms that have advanced capabilities, advantages or special arrangements, identify those features and their basis (e.g., contractual or general control).
- Please summarize any internal reviews or studies of your company on how a certain level of redemption will affect Teether, including its convertibility to US dollars, or the financial position of your company.
Tether is not the only stabilizer issuer in St. Louis, just the most important. Brown too Sent a letter At Coinbase, Gemini, Paxos, TrustToken, Binance.us and Center.
What’s happening now? Well, we wait. According to the Senate, Teether has ten days to respond to the letter. And Brown quickly noticed that he wanted to hear the response “in clear, simple language.”
What are the prospects for CEO Jean-Louis van der Veld to respond by December 3? Not great. He could not be seen or heard from Too long.