Fake Tethers under fake bitcoins.
Fake Tethers under fake bitcoins. It's an illustration of what may be happening (Photo via Shutterstock).
Alt coins

Account expertly trolling Tether is back on Twitter

Tether Printer is once again printing, albeit under a slightly new name

By  / February 13, 2018 /

It’s not the most significant bits of news: a Twitter account is now back online after being temporarily suspended. Then again, “Tether Printer” (or, as it’s currently called, “Not Tether Printer”) isn’t a simple account.It was down for a couple of days but was back in operation Monday night.

Tether Watch

Tether, of course, is the allegedly U.S. dollar-backed cryptocurrency that happens to have been started by the same folks who run Bitfinex, the world’s largest bitcoin marketplace. It’s alleged that large chunks of tether are being issued out of thin air and being used by the company’s owners to prop up the prices of bitcoin and other cryptocurrencies on exchanges, especially Bitfinex. The Commodity Futures Trading Commission (CFTC) paid a visit to their offices to hand over a subpoena or two.

Conjuring new tether goes against the premise of the coin, which is that each one is worth $1 because it’s backed by dollars somewhere in a bank. The idea is that tether owners should be able to move dollars around the cryptocurrency universe without the regulations or prying eyes of, say, Uncle Sam. When all of those owners want to return to fiat money, they should then be able to cash in their tether like casino chips. Ideally.

Except there’s a question of just how many dollars are really backing tether. Tether publishes a lovely-looking balance sheet but they no longer have a relationship with their auditors. For some time now, one can’t buy tether directly on the company’s website because they no longer have the kind of proper banking relationship that would allow for it. Instead, it’s traded for U.S. dollars on the Kraken exchange where it can then be transferred to, say, Bitfinex and sold for bitcoin.

Yet there are all these new tether being issued. The trend started—surprise!—just when Tether lost its banking relationships in April 2017. Since then, the amount of tether outstanding has gone from $50 million to its current $2.2 billion size.

Thus a clever person (or persons) decided to come up with a fun way to keep track of the breathtaking amount of tether being issued every time it happens—by publishing a tweet with the amount under the name Tether Printer. Here’s a recent example, where $100 million in tether dropped into the world three times in five days:

According to brains behind Tether Printer, they were temporary blocked from Twitter for not specifying that they were a parody account. It’s now been renamed “Not Tether Printer” to remind Twitter’s management that they’re in it for the lulz.

Then again, when one is covering a coin that acts like a joke, isn’t that obvious?

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Lawrence Lewitinn, CFA was the founding editor in chief of Modern Consensus. Disclosure: Lewitinn owns no cryptocurrencies in his portfolio.