What's Going On With Tether: 15 million Omni Tokens Failed to Transfer

A strangetransactionhappened out of the Tether mint wallet, as 15 million OMNI tokens were created on Bitcoin's Omni layer. The transaction, listed as invalid, brings up questions about the intentions of Tether and why it needed OMNI tokens for what it did.

OMNI is a strange choice for a token, and raises questions on the intentions of Tether. At the moment, trading pairs for OMNI tokens are only against Bitcoin.

OMNI tokens move just around 26 BTC in 24 hours, and there are very few OMNI tokens. But in a way, the above transaction shows that Tether may be capable of creating another asset, one active on Poloniex, to further prop up Bitcoin's price.

The other disconcerting thing is that the wallet thatstole 30 million USDTlast week also held some OMNI tokens. No one really knows if the creation of OMNI tokens was intentional, or a mistaken attempt to mint new USDT. The other possibility thrown around is that someone may have gotten hold of the minting wallet of Tether.

The Tether login has resumed work after being closed for around a day. But the developments around the project, linked to Bitfinex, are creating more speculation.

For Reddit users, the new printing of Tethers that has accelerated in November seems strange and there may be signs that the demand does not arise from influx of fiat, but from other tokens. At the moment, the Tether page does not state that the Tethers are backed by dollars, but by "assets":

At the moment, Tether is being audited by Friedman LLP., one of the leading US audit firms. The results are not yet out.

But the issuance ofTethershas raised skepticism from Reddit users:

"The liklihood that some rich guy is sending tether 700 million dollars in 10/20 million dollar increments, almost always on the slightest sign of price weakness, is absurd," wrote user GettingGains.

User bfx_drew, who claims to work for Bitfinex, has stated another possibility, but without certainty:

"Isn't it more plausible that this is not someone writing a check for tethers (money coming in from outside the crypto ecosystem) but more likely it is coming from converting other cryptos into USDT? There are whole exchanges that use USDT for their psuedo-USD trading pairs, and these exchanges are dramatically increasing in value of total crypto holdings..."

And according to the Twitter of Bitfinex'ed, Tethers have a disproportionate effect, mostly because of the timing of creation:

"The market cap is inflated by 5b or more for every 10 to 20m tethers.— Bitfinex'ed🔥 #DontGetTethered (@Bitfinexed)November 28, 2017"

The market cap is inflated by 5b or more for every 10 to 20m tethers.

Time will tell what the intentions of Tether are, but until then, most users believe the growth of Bitcoin is not entirely organic.