Ethereum’s Joseph Lubin: Bitfinex, Tether Situation ‘Probably Won’t Get Better’

As covered, Bitfinex was accused by New York’s Attorney General of participating in a cover-up to hide $850 million in losses. The allegations revived …

Ethereum co-founder Joseph Lubin, who’s also the founder and CEO of cryptocurrency-related software company ConsenSys, has recently stated he believes the Bitfinex, Tether situation seems to be a “really big mess” that “probably won’t get better.”

Speaking to Bloomberg at the sidelines of the Fluidity Summit conference in New York, Lubin revealed he thinks some good may come out of it, as other stablecoins may gain traction. He was quoted as saying:

Tether is somewhat important to our ecosystem because it’s used by different institutions to effect more fluid trading. There are other price-stable tokens out there — many others — and I think they’re going to gain traction because of this. I think that will be a really good thing.

As covered, Bitfinex was accused by New York’s Attorney General of participating in a cover-up to hide $850 million in losses. The allegations revived concerns over Tether’s backing, as it was supposed to have 1 USD in reserve for every USDT token in circulation.

Earlier this year the company quietly diluted its reserve claims, and soon after it was revealed that USDT is backed by cash and short-term securities equal to 74% of USDT tokens in circulation. Worryingly, Tether accounted for over 80% of bitcoins’ trading volume as of March of this year.

Bitfinex reportedly lost the $850 million as a third-party payment processor claims the funds were seized by governments throughout the world. To fix the situation it’s set to hold a $1 billion initial exchange offering (IEO) that’s said to already have lined up the $1 billion in commitments.

Regarding concerns Tether’s USDT tokens have been used to manipulate the price of bitcoin – something the US Department of Justice is investigating – Lubin noted that “all prices on the planet are being manipulated.” He added:

Any time that well-resourced actors can get in there and do something, you have to expect them to do that. So we need to build better system.

Lubin added that the “status of things is great,” as last year’s price correction aw the system grow “enormously” as those who were “pulled in by excitement riven by price growth” stayed in the crypto space and have been helping build it.

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Fluidity to Introduce Ethereum-Based Mortgages This Summer

Fluidity will then process the information and create a smart contract using a tokenized representation of the mortgage. Lippiatt then explained that the …
Photo: Fluidity / Facebook

Photo: Fluidity / Facebook

The blockchain technology has become a reliable ledger that hosts information for many industries including supply chains. Now, on fintech startup called Fluidity plans to launch a project that will log mortgages onto the blockchain network. On Thursday the company announced its schedule to develop the first ethereum-powered mortgages in New York and California.

After all the licensing paperwork is finalized, Fluidity executives said the offering is planned for this summer. The chief architect of Fluidity, Todd Lippiatt, said:

“We’ll tokenize the house, which will effectively take the collateral that is the equity of the house. You’re pledging the house and you get an advanced rate back in terms of dollars.”

When the FINRA-registered broker-dealer Propellr merged with the ConsenSys decentralized exchange (DEX) in early 2019, Fluidity appeared Sam Tabar, Fluidity co-founder, said that although Joe Lubin is still a major AirSwap shareholder, the company’s subsidiary, the parent company has another set of shareholders. Some of the new notable shareholders include Mike Novogratz, Bill Tai, and Brock Pierce.

Fluidity Mortgages

The startup’s upcoming mortgages are expected to use cryptocurrency and smart contracts for back-end management. Lippiatt said that Fluidity is currently looking for partnerships with ethereum-centric lending platforms like MakerDAO’s dollar-pegged DAI loans.

Currently, the ethereum-backed stablecoin still struggles to achieve liquidity and stability in the wider markets. However, Lippiatt believes that mortgages from such prospective partnership merely involve a “mitigatable” risk.

Thus, neither the property seller nor the borrower will directly touch any digital currency. He added that:

“We will deal with the inner workings of the decentralized system. The borrowers pay back in dollars and we will also be managing the risk profile of the underlying securities.”

Hence, borrowers must submit online credit checks and all other essential information just like in any other online loan platform. Fluidity will then process the information and create a smart contract using a tokenized representation of the mortgage. Lippiatt then explained that the company can then package these loans together and resell them as securities via an exchange like AirSwap.

Fluidity’s Customers

In his view, the low-income and under-banked borrowers who can repay represent a prime opportunity for these loans. He elaborated:

“The whole portfolio will be a composition of a bunch of different loans. We are looking at methodologies by which we can deploy [underwriting] more algorithmically.”

DeFi smart contracts will offer theoretically auditable records. Moreover, Fluidity plans to offer cheaper rates compared to the banks. Nonetheless, the whole process provides the borrower with a quasi-traditional mortgage. The issuer and the subsequent traders are the main beneficiaries of this blockchain system functionality.

In the end, Lippiatt said that the company’s methodology is designed to offer better pricing. The pricing model solely depends on the intrinsic credit of the transaction. No external factors like the political trade winds and domestic central bank governance policies will affect these Ethereum-based mortgages.

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Joseph Lubin on Tether-Bitfinex Debacle: “It seems like a really big mess that probably won’t get …

The mess Lubin refers to is that in late April the New York State Attorney General alleged that Bitfinex lost $850 million and subsequently used funds …

Joseph Lubin, founder of ConsenSys and co-founder of Ethereum, has shared his views on the recent debacle involving controversial stablecoin, Tether, and its parent company Bitfinex exchange.

Speaking at the Fluidity Summit conference, Lubin said that: “It seems like a really big mess that probably won’t get better.” The mess Lubin refers to is that in late April the New York State Attorney General alleged that Bitfinex lost $850 million and subsequently used funds from affiliated firm Tether to covertly cover the shortfall.

The issue is that Tether has had a shadow of controversy following it for some time, and this allegation hit not only the stablecoin, but also Bitfinex, and the rest of the cryptocurrency space which has now been piled with more bad press.

Good and bad

While the allegations being laid at Bitfinex have had little sway on the market, with Bitcoin now climbing above $6,000, it is still an unpleasant charge to be lingering. Lubin makes mention how Tether is somewhat important to the ecosystem because it’s used by different institutions to effect more fluid trading.

Moreover, the ConsenSys founder also made mention how this blow to Tether could be a benefit for other stablecoins which have emerged more recently.

“There are other price-stable tokens out there — many others — and I think they’re going to gain traction because of this. I think that will be a really good thing.”

What the future holds?

Part of Tether’s controversy was that the company maintained until only recently that it was 100 percent backed by a reserve of US dollars. However, that has been found to be untrue. Lawyers confirmed that Tether only had enough cash to back three-quarters of its increasing supply.

As Lubin states, this mess from Bitfinex and Tether is not going to get any better as the walls look to be crumbling down between the two companies. Tether could well be on its way to becoming defunct, but that could open the doors to other more reliable stable coins.

At the same time, Bitfinex is also suffering from the bad press as many customers look to pull out of the under siege exchange. Exchanges are a hot topic in the cryptocurrency space, so often marred by bad news of hacks, and illicit dealings.

The optimistic point of this debacle is that the market has manage to continue its growth regardless of the negativity stemming from these two rather large and influential cryptocurrency companies.

With that in mind, the future may well be heading into a space devoid of Tether and Bitfinex, but if the allegations are correct, and there has been nefarious actions from the two companies, this may well be for the better in the end.

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Ethereum Co-Founder Predicts Tether-Bitfinex’s Big Mess Led Other Stablecoins Thrive

Beside Ethereum co-founder, Mr.Lubin is the founder of ConsenSys, a crypto-based software company. According to Lubin, the mess wouldn’t get …

Bitfinex and Tether debate isn’t over yet – one such recent comment can be seen by Joseph Lubin, founder of blockchain tech company ConsenSys.

Bloomberg reported on May 09, 2019 that Mr.Lubin at the Fluidity Summit Conference in Brooklyn, New York says that ‘Bitfinex and Tether’ topic is like a really big mess. Beside Ethereum co-founder, Mr.Lubin is the founder of ConsenSys, a crypto-based software company. According to Lubin, the mess wouldn’t get better – as Coingape reported $850 million frozen USDT from Tether reserve and the NY’s attorney’s allegation that indicates Tether isn’t fully backed by USDT.

Following the similar note, Mr.Lubin states;

“Tether is somewhat important to our ecosystem because it’s used by different institutions to effect more fluid trading. There are other price-stable tokens out there — many others — and I think they’re going to gain traction because of this. I think that will be a really good thing.”

The whole mess possibility drives the growth in other stablecoins according to Lubin. He presumes other new/existing stablecoins out there in the market will get good exposure from USDT’s ongoing debate of missing the taste of stablecoin. He adds;

“There are other price-stable tokens out there — many others — and I think they’re going to gain traction because of this. I think that will be a really good thing.”

To remind, stablecoins from big players like USD Coin [USDC] from Coinbase and Gemini Dollar’ [GUSD] from Gemini Exchange are striving to perform a lot better than Tether [USDT]. Nevertheless, Gemini exchange is already stepping higher as it has recently partnered with Harbor, a digital securities platform for tokenized securities offerings.

Beside Tether-Bitfinex turmoil, Mr.Lubin also focused on the price aspects revolves around cryptocurrencies. He says that ‘all prices on the planet are being manipulated, adding that;

Any time that well-resourced actors can get in there and do something, you have to expect them to do that. So we need to build better systems.”

Summary
Ethereum Co-Founder Predicts Tether-Bitfinex’s Big Mess Led Other Stablecoins Thrive
Article Name
Ethereum Co-Founder Predicts Tether-Bitfinex’s Big Mess Led Other Stablecoins Thrive
Description
Bitfinex and Tether debate isn’t over yet – one such recent comment can be seen by Joseph Lubin, founder of blockchain tech company ConsenSys.
Author
Tabassum
Publisher Name
Coingape
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Ethereum Co-Founder Says All Prices On The Planet Are Being Manipulated

Ethereum co-founder and ConsenSys founder, Joseph Lubin, speaking at the Fluidity Summit Conference in Brooklyn, had much to say on the …

Ethereum co-founder and ConsenSys founder, Joseph Lubin, speaking at the Fluidity Summit Conference in Brooklyn, had much to say on the subjects of Tether, Bitfinex, and price manipulation on the market. Bloomberg first reported the story.

Lubin said,

All prices on the planet are being manipulated. Any time that well-resourced actors can get in there and do something, you have to expect them to do that. So we need to build better systems.

Price manipulation is not uncommon in the crypto market, and is a concern for investors and regulators, as those with large amounts of crypto and other resources can have considerable sway in influencing a token’s price.

Lubin also offered his opinion on the recent Tether and Bitfinex scandal. Both are being taken to court, and the New York Attorney General’s office has accused Bitfinex of covering up $850 million in losses through illicit funds. Lubin remarked,

It seems like a really big mess that probably won’t get better. Tether is somewhat important to our ecosystem because it’s used by different institutions to effect more fluid trading…There are other price-stable tokens out there — many others — and I think they’re going to gain traction because of this. I think that will be a really good thing.

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