As Tether Faces Ransom Demands, Falling Market Cap And Negative Media Attention, Could it Crash?

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Crypto is seeing a (temporary) revival in the past two days, which took Bitcoin from $17k all the way back to $21k and brought some back calmth to investors. However, with the scary week that has just ended, with the Celsius and Terra scandals still fresh in our mind, the MSM (mainstream media) wonders which coin could be the next victim. Fingers point to the cryptosphere’s largest stablecoin, Tether.

That’s not looking very good 👀 #Tether about to crash like USTC? pic.twitter.com/g6b65lqyMA

— Chloé XRP 🇬🇧 🤝 🇺🇦 (@Chloe_Le_Pen) June 18, 2022

Given that some 20% of Americans own some form of crypto, you can only make assumptions about how much money has been taken out of the platforms altogether in the past few weeks, how much has been lost and lastly how much has been temporarily parked in stablecoins.

Free fall

Tether, largest stablecoin of them all, is seeing it’s market cap continue to evaporate nevertheless. About a month ago, Tether had seen $10 billion in withdrawals, today the number is said to be about $13 billion already.

As eternal nemesis Cryptowhale has repeatedly remarked in the past days, Tether is losing its reserves as investments it is holding are losing value. Cryptowhale stated:

Tether in free fall. The true reason why the crypto markets are crashing.

Tether in free fall. The true reason why the crypto markets are crashing. pic.twitter.com/aqOZdRccaO

— CryptoWhale (@CryptoWhale) June 18, 2022

Summarizing the importance of Tether, Hilary Allen, a finance expert at American University, explained in the New York Times this weekend that:

Tether is really the lifeblood of the crypto ecosystem. If it imploded, then the entire facade falls down.

Even Vox weighed in on Tether’s importance and the many conspiracy theories currently surrounding the coin. None of those stories are helping to calm things down of course.

Ransom demands

Lastly, there are reports of DDOS attacks on the Tether platform, as even CTO Paolo Ardoino now admits.

1/
This morning @Tether_to received a ransom request to avoid mass DDOSes.
They tried already once.
On a normal day we have around 2k reqs/5min
The attack brought us to 8M reqs/5min. pic.twitter.com/rWEan5VNFX

— Paolo Ardoino (@paoloardoino) June 18, 2022

He stated that Tether now regularly faces ransom demands and will have to try and stave off those attacks, or risk further ones. Tweeting this weekend, Paolo said:

Tether received a ransom request to avoid mass denial of service attacks. They tried already once. On a normal day, we have around 2,000 requests per five minutes. The attack brought us to eight million requests per five minutes.

Let’s see if that dollarpeg is secure.