Tether, the company responsible for issuing dollar-backed USDT tokens, announced Wednesday via twitter that it had destroyed 500 million USDT — representing nearly 53% of prior outstanding tokens — after a “significant amount” of USDT were redeemed from the circulating supply, according to the company’s official website.
The statement said 446 million USDT tokens would remain in the company’s treasury to service demand for future issuances.
Tether’s USDT continues to be shrouded in concern that it may not have sufficient US dollar reserves to back issued tokens. Tether employed law firm Freeh, Sporkin & Sullivan LLP back in June, consisting of three former federal judges to conduct randomized inspections of its issued tether and corresponding currency reserves to alleviate the concern, but critics note that this process fell short of a complete audit.
Tether continues to be the focus of alleged mass-scale market manipulation, fueled by a University of Texas study that claimed to find circumstantial evidence from unexplained market patterns and blockchain data that indicated Tether may have been using USDT as an instrument to manipulate cryptocurrency prices during market downturns.
These controversies have been linked to the USDT token’s rapid decoupling from dollar parity when it fell as low as $0.925 on Oct. 15. At the time of writing, Tether is trading at $0.991.
Tether’s USDT token has overwhelmingly dominated the growing stablecoin market to date, but its hegemony is now at risk with a slew of new market entrants including Paxos Standard (PAX), Circle’s USD Coin (USDC), and Gemini Dollars (GUSD) — all of which have been given license by the New York Department of Financial Services and claim transparent auditing.