According to a blog post published Dec. 21, Bitfinex, Hong Kong-based cryptocurrency exchange has initiated margin trading for stablecoin Tether (USDT).
Bitfinex has introduced margin trading for the USDT/USD pair, which would outwardly lead to more resourceful price discovery and enable consumers to hedge the revelation taken on stablecoins. The post also suggested that along with a dedicated lending market, USDT will be offered as collateral for margin positions.
With stablecoin margin trading currently limited to USDT/USD, the exchange at the time of sufficient liquidity will plan to commence margin trading for some other stablecoin pairings too.
Earlier in December, Bitfinex and Ethfinex lent support to four new major USD-backed stablecoins which include USDC, True USD (TUSD), Paxos (PAX) and the Gemini dollar (GUSD). The four coins clubbed with the coin DAI (Ethereum-backed) and USDT, the industry stalwart. All of them are to be traded against the U.S. dollar.
In late November, Bitfinex became the subject of an investigation by the United States Department of Justice (DoJ) in association with suspected cryptocurrency market manoeuvring. The agency was determined to probe on whether or not USDT was used to synthetically escalate Bitcoin (BTC) prices during the previous year’s meteoric rise.
In the perspective of a broader analysis, whether the “market tricks” partially inflated crypto prices in recent years, the DoJ was apparently examining into how Tether issues its new tokens and why the bulk of USDT enters the market through Bitfinex.
The DoJ’s purportedly intensified enquiry into activity on Bitfinex adds to prior investigations into possible wrongdoing. Back in December 2017, Both Bitfinex and Tether received subpoenas from U.S. regulators for undisclosed reasons. This supposedly establishes the unrelenting doubts over Tether’s claims that USDT is backed one-to-one by the U.S. dollar.
