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Bitfinex Introduces Margin Trading for Tether (USDT)


cryptovest.com 24 December 2018 07:58, UTC
Reading time: ~2 m

Hong Kong-based cryptocurrency exchange Bitfinex announced on Friday it had launched margin trading for Tether (USDT) against US dollar, as it seeks to improve its stablecoin offering “in line with market evolution and consumer demand”.

“Today, adding margin trading on USDT/USD pair will not only allow for more efficient price discovery, but in an important move for risk management, unlock the ability to hedge the exposure taken on stablecoins,” Bitfinex said in a statement.

With immediate effect, traders will be able to carry out leveraged trades for the trading pair, which means that they will be able to use borrowed funds from the platform to exchange USD and USDT. In addition, USDT will be available as collateral for margin positions. More stablecoin margin options will be introduced once sufficient liquidity is reached, Bitfinex added.

Earlier in December, Bitfinex added support for four new major USD-backed stablecoins — USD Coin (USDC), True USD (TUSD), Paxos (PAX) and the Gemini dollar (GUSD). The coins joined the already supported USDT and Dai (DAI).

In late November, Bitfinex and Tether became the subject of a probe by the United States Department of Justice (DoJ) due to suspicion that the two companies, which share management, have been involved in illegally inflating the price of Bitcoin (BTC) during last year’s drastic surge of the original cryptocurrency.

That was not the first time that US authorities have looked into the two companies. Last December, the US Commodity Futures Trading Commission (CFTC) subpoenaed Tether and Bitfinex seeking proof that USDT is backed by a reserve of USD. While neither of them was accused of wrongdoing, the controversy persisted. Dispelling the allegations, Bloomberg reported earlier this month that according to newly-obtained bank statements, Tether is fully backed by fiat holdings.

The USDT’s exchange rate tends to fluctuate slightly around $1. At the time of writing, however, the stablecoin is trading at exactly $1. With a market cap of around $1.86 billion, the coin is currently the sixth-largest crypto asset in CoinMarketCap’s chart.

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