Tether [USDT] facing turbulent times; crypto-loaning firm Nexo denies close association

On October 16, cryptocurrency lending firm Nexo interacted with the community regarding the ongoing issues with the USD-backed stable coin Tether [USDT]. The company acknowledged that it has never possessed any significant amounts of USDT on its balance sheet. In its official Twitter post, Nexo wrote:

“Nexo follows the situation around Tether (USDT) closely. We would like to assure all clients and investors that Nexo has never held significant amounts of Tether (USDT) on its balance sheet. We are soon adding support for more stablecoins.”

Last week, a controversy emerged regarding the legitimacy of USDT, when the popular cryptocurrency exchange, Bitfinex, was allegedly facing insolvency post the pause of USD transactions on the platform. Following this, the exchange got into trouble and was scrutinized over the suspicion of using USDT in huge amounts. Furthermore, allegations stated that no transparent audits had proved that the stable coin is actually backed by the US Dollar.

In the same timeframe, the biggest cryptocurrency in the world, Bitcoin [BTC], also faced a fatal drop in the crypto-market. This was speculated to have occurred due to disruption in the Bitfinex ecosystem and the stoppage of USD trading on the platform.

However, the price of Tether has not been affected by the news as of now. At the time of writing, the stable coin was trading at $0.976, with a market cap of $2.2 billion. The USDT market is up by 1.53% with a 24-hour trading volume of over $3 billion.

Coffee$Bear, a Twitter user, and a cryptocurrency space enthusiast, commented on Nexo’s tweet:

“If I take a loan in USDT do I owe USDT or USD?”

Here, another cryptocurrency and blockchain space follower responded and wrote:

“you owe USD, no matter what kind of loan you take or what is your collateral.”