It has been two weeks since tether, the "stablecoin" of choice for crypto day traders who need to quickly enter and exit positions in different alt coins, broke below its $1 peg to trade as low as 85 cents as long-simmering doubts about its dollar backing exploded back into view, stoked by rumors that several prominent exchanges were preparing to de-list it.
While tether has recovered, skepticism about the feasibility of tether, and "stablecoins" in general, has continued to fester, stoked by the fact that tether's parent company has never bothered to publish an audit of its holdings to prove to the public that it has the necessary dollar reserves to guarantee convertibility. Tether also found itself at the center of a separate controversy back in June when a University of Texas academic published a paper alleging that shady traders were using tether to manipulate the price of bitcoin.
In an effort to restore faith in tether, the company on Thursday published a letter from a Bahamanian bank affirming that the company has $1.8 billion in deposits sitting in an account offshore. But as several traders swiftly pointed out, the letter from Deltec Bank & Trust, which describes itself as "an independent financial services group", bore a few notable inconsistencies. For one, the PDF that tether made available for download featured inconsistent timestamps, suggesting that the document was 'modified' before being released to the public.
Another problem... the timestamps in the provided PDF are inconsistent, it was 'modified' before it was created.— Bitfinex'ed 🐧 (@Bitfinexed) November 1, 2018
Maybe Tether has a time machine? But the June report had consistent timestamps. pic.twitter.com/3htxNg5RnU
Others pointed out that whoever wrote the letter didn't attach their name - only an incomprehensible signature, which is a serious red flag, as one trader pointed out on twitter.
Pro Tip: When signing a letter on co. letterhead but don't want to be associated w/ the statements, stand by the statements, or be liable to a 3rd party:— lawson baker : 88发 babafa (@lwsnbaker) November 1, 2018
1-Do not print your name;
2-Do not legibly sign your name;
3-Write for ambiguity; and
4-Address to 1 person or no one. pic.twitter.com/Uoa7PbQ5Kp
Rather than quiet traders concerns, these inconsistencies could have the opposite effect. Particularly since the company fired its auditor a year ago. But for now, the price is holding steady.