Here Is Why USDT Tether Burned 500 Million USDT

By Rishma Banerjee

It was in the month of October, that Tether silently took out 500 million USDT out of circulation and then proceeded to destroy them. This was a major event in the stable coin saga, as Tether Limited, the company behind the minting and distribution the USD-pegged ‘stablecoin’ Tether (USDT) $1.01195 +0.11%, removed the 500 million USDT from circulation.

Data from OmniExplorer.info revealed that Tether moved 500 million USDT from their treasury address to a different address , which the firm’s website identifies as the official USDT issuing address. Once the transaction was confirmed, the issuing address rejected the tokens which in turn removed them from circulation and also destroyed them.

You may be wondering as to what the real reason behind this drastic move is. Tether had also foreseen such a scenario, and in anticipation of rising suspicions has issued a statement clarifying that this move was not related to the fact that its market cap, at that time had taken a 29% beating over accusations of participating in unsavory trading practices along with Bitfinex and suspicions of insolvency. The statement read:

Over the course of the past week, Tether has redeemed a significant amount of USDT from the circulating supply of tokens. In line with this, Tether will destroy 500m USDT from the Tether treasury wallet and will leave the remaining USDT (approx 466m) in the wallet as a preparatory measure for future USDT issuances. Conceptually, the Tether issuance and redemption process is outlined in the Tether white paper, with issuances and redemptions visible through observing the Tether treasury balance on the OMNI blockchain.

However, what was rather interesting to note was that all 100% of the transfers that took place from an address that is controlled by Bitfinex, the crypto exchange that is linked to tether in terms of management and ownership. The general belief was that the exchange was removing tether in order to cover up some unpleasant activities, but the real reason was to push back the exchange rate towards its normal 1 USD mark.