The title of The New York Times’ Hard Fork podcast paints a grim picture of the crypto industry: “Everyone Pivots to AI, and Bad News for Crypto.”
The subhed is even worse: “Is crypto dead? Or only mostly dead.”
It’s not all bad news. While the price of Bitcoin has fallen 43% over the past year, it has risen almost 35% since January 1st.
Still, it was shocking to read last night that FTX believes it might be missing almost $9 billion in assets.
Now comes word that Tether might have skeletons in its closet, as well.
Tether is an important linchpin in the crypto economy. It’s eponymous stablecoin is the most widely traded cryptocurrency and provides an important means of liquidity for holders of digital assets. Moreover, its sister company runs Bitfinex, one of the world’s largest crypto exchanges
According to a Wall Street Journal review of emails and documents involving the company, however, both Tether and Bitfinex went to great lengths to mask their identities in order to stay connected to traditional banks and financial institutions.
In addition to opening banking accounts under different pseudonyms, the companies urged customers to keep the details of these arrangements to themselves. “Divulging this information could damage not just yourself and Bitfinex, but the entire digital token ecosystem,” a client page on the Bitfinex website read.
Certainly, the Journal’s analysis of Tether’s documents will only spur on legislators who are looking to treat cryptocurrencies as securities.
And that would be bad news for the crypto world, indeed.