Tether has reintroduced the option to redeem 1 Tether (USDT) token for one US dollar on its platform after the announcement made by crypto exchange giant, Bitfinex. Bitfinex announced that it would add other stablecoins on its platform to be traded alongside USDT, Tether’s token, as an indication of their neutrality.
The Relationship between Tether and Bitfinex
Tether and Bitfinex have been linked together in a series of events. About two months ago, it was speculated that Bitfinex transferred as much as 630 million USDT back to Tether’s official wallet address after the Tether price peg to the US dollar dropped. It was then theorized that Tether was buying back its tokens at a profit and slowly getting out of the stablecoin business.
Around the middle of the year, a research conducted by a professor at the University of Texas found traces of Bitfinex and Tether manipulating bitcoin prices to hit its all-time high. The researchers claimed that purchases with Tether were timed with market downturns and subsequent increases in bitcoin prices. Following this discovery, Tether has been under investigation from the Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DOJ) as to whether the claims are true. The heat is also Tether’s issuer Bitfinex on whose platform USDT is mostly traded.
Concerning the announcement made by Bitfinex, the exchange stated on its platform that;
“Now, thanks to stronger banking as a result of our new relationship with Deltec, Tether is able to return to its original vision of having a wallet for creating and redeeming directly on its own platform without having to rely on a third party. This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon.”
Introduced Rates for Tether Transactions
The announcement notes that the cashing out of USDT on the platform would be processed at the official market rate instead of the 1 Tether for 1 US dollar as previously used due to the frequent deviation of Tether price from its 1 dollar peg. They stated that sometimes the deviations could be even more than 5 cents.
Tether also introduced rates for deposits and withdrawals for fiat on their platform. Transactions at $100,000 are charged at 0.1% for fiat deposit or 0.4% for withdrawal. Transactions in excess of $1 million are charged a 1% fee while transactions over $10 million are charged at 3%. Deposit fees remain the same no matter the amount to be deposited.
This will prompt USDT traders to prudently manage their deposits and withdrawals in the wake of making gains and incurring less charges. Tether’s stiffest competitors, Paxos Standard and Circle’s USDC do not charge any fees for withdrawals. However, they charge at least $100 for conversions.