Proving the Worth of Tether: A Controversial Narrative

In the wake of the recent Tether hack, a compelling narrative has risen as to the relation between the dollar-pegged cryptocurrency and Bitfinex. One side of the story claims the massive exchange is, in fact, a Ponzi scheme, while another outlines the rattlings of a disgruntled investor.

Tether Hack & Bitfinex

When close to $31 million worth of Tether was hacked on November 19, 2017, the crypto space was up in arms. Experts and analysts spoke out in a number of different ways, most of which were naturally very critical. The most concerning feature was that the hack revealed a massive amount of control in the hands of one platform.

Cornell professor, Emin Gün Sirer, tweeted that, “It’s hard to distinguish [Tether] it from a regular database under sole custody.”

What’s more is that the same individuals who run the exchange Bitfinex also created Tether. This fact, however, was vehemently opposed by both parties until the release of the Paradise Papers showed that the two are indeed connected.

In an article by New York Times journalist Nathaniel Popper, he outlined that, “Appleby, an offshore law firm, helped Potter and Devasini, the Bitfinex operators, set up Tether in the British Virgin Islands in late 2014.” […]

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