Tether’s CTO Paolo Ardoino Addresses Recent USDT Price Discrepancy Amid Binance Legal Battle.
In the wake of a notable depegging incident involving USDT, the world’s largest stablecoin by market cap, Tether’s chief technology officer, Paolo Ardoino, has stepped forward to shed light on the situation.
Over the weekend, USDT experienced a temporary loss of its peg to the dollar, briefly trading as low as $0.94 on Binance.US. However, Ardoino clarifies that USDT never truly deviated from its peg to the dollar. Instead, he attributes the price discrepancy to liquidity issues specifically on Binance.US, unrelated to the stability of the stablecoin itself.
Ardoino, who also serves as the CTO of Bitfinex, a cryptocurrency exchange, explains that Binance.US is likely facing challenges in securing enough market makers due to the ongoing legal battles it is entangled in. This lack of market makers makes it difficult to maintain market liquidity, leading to amplified volatility.
Addressing misconceptions, Ardoino acknowledges that some have drawn conclusions about USDT depegging based on its trading below par on Binance.US. However, he emphasizes that Tether is responsible for its primary market, Tether.to, while the role of arbitrageurs and market-making professionals is to handle market making on secondary markets like crypto exchanges. Furthermore, Ardoino points out that other trading pairs, such as BTC/USD, also exhibit spreads across exchanges, highlighting that the same logic applies.
Binance.US is currently embroiled in a legal battle with the U.S. Securities and Exchange Commission (SEC) and is actively working to prevent the regulator from seizing its assets. The SEC initially sued the crypto exchange last month, alleging the sale of unregistered securities.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.