Tether [USDT], claims to have received a ransom amount posing for 500 bitcoin [BTC, +11.98%], least documents are made public that would “harm the bitcoin ecosystem.” Tether disclosed the alleged extortion attempt within an official tweet earlier on Sunday.
“While we believe this is often a reasonably sad attempt at a shakedown, we take it seriously. We’ve reported the cast communications and therefore the associated ransom demand to enforcement. As always, we’ll fully support enforcement in an investigation of this extortion scheme,” Tether tweeted.
Tether serves a crucial, though sometimes controversial, role within the cryptocurrency market. Its USDT token, pegged to the U.S. dollar, is employed by traders, exchanges, and throughout the cryptocurrency economy giving it what some call systemic importance.
Within the past year, coinciding with the meteoric rise in the price of bitcoin, Tether’s market capitalization exploded to over $34 Bln from $2 Bln. Tether has claimed that each USDT issued is backed by dollars or dollar-equivalents held during a saving account, which has become some extent of contention among academics, crypto-skeptics, and therefore the NYAG [New York Attorney General].
In recent days, documents have circulated online purportedly revealing an email thread between a Tether employee and representatives for Deltec, the Bahamanian bank explained to carry USDT reserves, that reignite questions on tether’s backing.
The emails haven’t been verified. Tether denied their legitimacy within the same Twitter thread announcing the extortion attempt. A firm representative has not skilled an invitation for comment at the reporting time.
Earlier on Tuesday, Tether settled with the NYAG regarding a multi-year investigation regarding an $850 Mln loan made to its Bitfinex exchange. The firms didn’t admit wrongdoing as a part of the settlement.
Attorney General Leticia James said, however, “Tether’s claims that its digital currency was fully backed by USD in the least times was a lie.” Under terms of the agreement, Tether will offer quarterly reports on its reserves for the subsequent two years.