Bitfinex Chief Technology Officer (CTO) Paolo Ardoino says that Tether is a “huge” money driver for the exchange, despite the legal trouble over last year’s investigation.
According to an interview with Decrypt on Mar. 10, Bitfinex’s CTO called tether a huge money driver for the exchange. Bitfinex is the primary operator of Tether’s USDt stablecoin, which is said to be backed with U.S. dollars. Tether has dominated the stablecoin marketplace, with a market cap of $4.9 billion and daily trading volumes of $51 billion, higher than even bitcoin.
However, USDt has come under controversy regarding its exact backing. While Tether was originally billed as being back 1:1 with US dollars, Bitfinex revealed the currency is only 74% backed following last year’s investigation. The cryptocurrency exchange has been accused of using Tether reserve funds to cover $850 million in losses incurred after its Panama-based payment processor Crypto Capital was found to be fraudulent.
Despite spending more than $500,000 on legal costs related to the case, Bitfinex’s CTO Paolo Ardoino calls Tether a major money driver for the exchange.
He told Decrypt,
It’s a huge money driver. That is one of the reasons why our racing horse is USDT.
The revenues of Tether are basically cash holding and safe investments like treasuries, so you can easily understand that if you can have a three, 3.5% return per year on a $4 billion market cap, or $4.8 now billion market cap, that is quite some interesting money there. You can do the math. More than $100 million.
Ardoino added that the majority of Tether reserves are held in cash rather than investments. He concluded by explaining the sudden boom in stablecoins, claiming others are “trying to get a piece of the pie.”
Featured Image Credit: Photo via Pixabay.com