A startup bank based in Puerto Rico is purportedly struggling to stay afloat. New research supports the assertion that Tether might be moving its reserves out of the bank.
‘They’re Desperate’
Noble, a Puerto Rico-based startup bank, is supposedly having serious cash-related issues and has already reached out for a cash lifeline, Modern Consensus reports, citing highly-placed sources familiar to the matter. One of the sources said:
If Noble doesn’t get cash soon, they will only have a few days left. They’re desperate.
New research by Hong Kong cryptocurrency exchange BitMex, published October 2nd, indicates that bank deposits in the category of International Financial Entities, which includes Noble, are down 18.4 percent for the second quarter. The research reads:
In our view, this data supports the assertion that Tether is moving its reserves out of Noble and into other banks outside of Puerto Rico. BitMEX Research has also been informed by Tether insiders that the Tether funds have been diversified into other banks.
Bloomberg, on the other hand, reports that the bank is looking for a buyer, citing people with direct knowledge on the matter. Purportedly, it’s looking at a valuation between $5 million and $10 million based mainly on its Puerto Rican license to function as an institutional financial entity.
Tether – A Stablecoin of Controversy
Tether is a cryptocurrency pegged to the US dollar 1:1. Yet, it has been under the crosshairs for quite some time now. Back in June, a paper called “Is Bitcoin Really Un-Tethered?” got published, claiming to have identified evidence of serious price manipulation dating back from November 2017.
In June, Tether engaged the services of the law firm Freeh, Sporkin & Sullivan LLP to go through the bank account documents and to inspect the circulating amount of Tether randomly. The report concludes that the digital currency is, indeed, backed by fiat, stating:
FSS is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018.
However, in August alone, over 500 million USDT tokens were created, according to data from Omni Explorer. Despite this, there was absolutely no sign of a cryptocurrency market pump, which might suggest that printing Tether is not necessarily tied to the price swings.
Do you think Tether is used to manipulate the price of cryptocurrencies? Don’t hesitate to let us know in the comments below!
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