Stablecoins

Tether Destroys 500 Million of Its USDT Coin

Tether Destroys 500 Million of Its USDT Coin

According to transaction data from Tether’s accounts, it took 500 million USDT permanently out of circulation on Wednesday.

Transfer and Burn

The company first transferred the amount from its treasury account to another address, then revoked the tokens from that address. The transactions can be seen via data on the Omni blockchain. 500 million is reportedly more than half of all USDT in circulation.

Revoking a token means it can never be used again, as opposed to merely removing it from mainstream circulation like the tokens stored in its treasury account, according to CCN.

Tether issued a statement the same day confirming that it was, in fact, the one to destroy all these tokens, stating:

“Over the course of the past week, Tether has redeemed a significant amount of USDT from the circulating supply of tokens. In line with this, Tether will destroy 500m USDT from the Tether treasury wallet and will leave the remaining USDT (approx 466m) in the wallet as a preparatory measure for future USDT issuances.”

The remaining balance in the treasury account matches the amount stated as of this writing.

A Need For More Trust

Tether’s market value took a precarious dip earlier in October, decreasing by $0.10 from where it previously sat at roughly 1USD. The dip prompted a mass sell-off of USDT, which ended up boosting the price of Bitcoin. It has since rebounded to just under one dollar in value.

Both Sides of the Tether Debate: is the Crypto Market Vulnerable to Implosion?
Related: Both Sides of the Tether Debate: is the Crypto Market Vulnerable to Implosion?

The stablecoin’s recent troubles have led everyone from journalists to billionaire investors to weigh in on the legitimacy of Tether, and the market at large. The company reportedly promised regular audits of its holdings in its white paper but has failed to deliver on them, though it has released a partial one that appears to confirm it can match every USDT with a dollar.

Some have said that audit was misleading because it didn’t include the company’s liabilities, while others like Mike Novogratz have cited the difficulty of obtaining an audit for any crypto project.

As we reported before, most investors seem sure that Tether’s coin is backed by the dollar, but the company hasn’t been as transparent as it could be with its holdings, and that is what’s sparked concern. No one can fully know whether Tether is fully backed by USD until a more comprehensive audit is released.

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Cover Photo by guille pozzi on Unsplash

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John Bogna

John Bogna is a freelance writer and journalist with seven years of experience covering everything from arts to tech.

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