The history of Tether (USDT) stable coin is long and complicated. It grew because it provided a much-needed option for exchanges that struggled with establishing banking partnerships but needed fiat on/off ramps and to provide a stable cryptocurrency solution for Bitcoin.
A brief history of Tether
Below is a brief timeline highlighting some of the key dates in the history of Tether (USDT).
November 20, 2014 - Realcoin rebrands as “Tether” and officially launches in private beta. Project Co-founder Reeve Collins tells CoinDesk they changed the name to avoid being associated with altcoins.
February 25, 2015 - Trading begins
December 31, 2016 - Tether issues 6 million USDT. This is six times what it issued the year before.
April 24, 2017 - Temporarily dips to $0.91 amidst reports that Bitfinex has been cut off from Wells Fargo and shut off from Taiwanese banks.
In August 2017 - A Bitfinex spokesperson said that "Bitfinex does not own Tether'' and that it is a sister company with a minority percentage (about 30%) of overlap in shareholders.
Sept. 15, 2017 - USDT releases the first attestation (done by Friedman LLP). It confirms that Tether has corresponding USD reserves of $443 million.
November 7, 2017 - Leaked documents “The Paradise Papers” link Bitfinex and Tether to the same individuals. The papers name Bitfinex officials Philip Potter and Giancarlo Devasini as responsible for setting up Tether Holdings Limited in the British Virgin Islands in 2014. Previously, they insisted the two operations were separate; however, they were widely suspected to be the same.
November 19, 2017 - USDT is hacked when 31 million Tether are moved from the Tether treasury wallet into an unauthorized Bitcoin address. To prevent the funds being spent, it initiates a hard fork.
December 6, 2017 - The U.S. Commodity and Futures Trading Commission subpoenas Bitfinex and Tether, according to Bloomberg. However, the actual documents are not made public.
January 3, 2018 - A change to the legal terms of service states: “Beginning on January 1, 2018, Tether Tokens will no longer be issued to U.S. Persons.”.
January 31, 2018 - Tether issuance takes on a rapid, frenzied pace. Meanwhile, the price of bitcoin plummets. Tether issues 850 million USDT, more than any single month prior. Approx 250 million of this amount were created during a mid-month bitcoin price crash.
June 1 2018 - The second attestation is released, carried out by law firm Freeh, Sporkin & Sullivan. It confirms that Tether had corresponding USD reserves of $2.5 billion. However FSS isn’t an accounting firm and “The bottom line is an audit cannot be obtained,” Stuart Hoegner, Bitfinex and Tether’s General Counsel, tells Bloomberg.
June 25, 2018 - Bolstering suspicions that Tether is being used to prop up the price of bitcoin, a paper titled “Is Bitcoin Really Un-Tethered” is released by two researchers John Griffin and Amin Shams from University of Austin, Texas.
October 14, 2018 - Amid concerns over the company's solvency and its ability to establish banking relationships, Tether’s peg slips again, this time to $0.92, according to CoinMarketCap, which aggregates prices from major exchanges. On a single crypto exchange Kraken, tether momentarily slips to $0.85.
October 24, 2018 - USDT announces it has “redeemed a significant amount of USDT” and will now burn 500 million USDT, representing those redemptions. According to the firm, the remaining 446 million USDT in its treasury will be used as “preparatory measures for future USDT issuances.”
November 1 2018 Tether releases the third attestation, carried out by Deltec Bank which confirms they have corresponding USD reserves of $1.8 billion.
November 30, 2018 - According to Bloomberg, Federal prosecutors have supposedly “homed in on suspicions that a tangled web involving Bitcoin, Tether and crypto exchange Bitfinex might have been used to illegally move prices.”
November 27, 2018 - USDT says its customers can once again redeem Tether for actual dollars. Once again, there are no reports or evidence of anyone having been able to redeem tether ever.
December, 18, 2018 - Bloomberg reports it has seen bank statements from accounts at Puerto Rico’s Noble Bank and the Bank of Montreal, taken over four separate months. The article suggests that Tether held sufficient dollars to back the Tether tokens on the market. Yet again, this is not a real audit. What stands out is that $61 million in the Bank of Montreal is listed under Stuart Hoegner, the firm’s general counsel.
December 31, 2018 - In the year 2018, it issued more than 1 billion tether.
February 26, 2019 - Admits, for the first time, that it’s operating a fractional reserve.
April 17, 2019 - Goes live on the Tron network as a TRC-20 token.
April 30 2019 - The company was sued by the The New York Attorney General’s office, for attempting to defraud New York residents. Under pressure, they acknowledge only 74% of its USDT tokens were backed with hard currency. The rest of the reserves were secured by lines of credit but they refuse to disclose to who. The saga continues.
October 2019 - Roche Freedman (NY law firm) files a class-action suit against Tether and Bitfinex for alleged market manipulation, concealment of illicit proceeds and for creating the “largest bubble in history.” The lawsuit reads, in part, that the two entities managed to operate a “sophisticated scheme” that involves “part-fraud, part-pump-and-dump, and part-money laundering.”
November 8 2019 - USDT Says its stablecoin is ‘Fully Backed’ again.
Jan 2020 - USDT balloons to over 900 million tokens which is almost 22% of total supply.