Tether, a so-called Stablecoin makes again headlines, this Time for a different reason. Crypto-traders in China have found ways to continue to crypto-currencies and Initial Coin Offerings (ICOs) to participate in actions by using Tether (USDT), and Virtual Private Networks (VPNs).
The Chinese government has already made several Attempts to close all the local stock exchange platforms, however, traders still trade and circumvent the prohibition in that they can be under different domain names.
A report by the South China Morning Post that the authorities take strict measures by locking the access to a total of 124 offshore crypto-exchanges, which offer Chinese investors their services.
Traders with their servers and their company headquarters abroad. From the report:
“The recent warning, which goes hand in hand possibly with enhanced surveillance measures, in particular, a number of smaller stock exchanges, the guidelines, foreign organizations, acted in reality, however, in China, and reported their activities to China outsourced,” said Terence Tsang, COO of TideBit, the operator of a centralized crypto stock exchange in Hong Kong and Taiwan. Stock exchanges, their home page are in Chinese, would be particularly strictly controlled.
Prior to the publication of this report, the volume of trade fell in seven of the most popular stock exchanges of the country by 33% to $ 2.5 billion. Some of the crypto-currency, according to experts, it is for the regulatory authorities is very difficult to block access to trading platforms completely, if the Server of the trading platforms are located outside China, and transactions, decentralized and peer-to-peer to take place. With the Trade to start, trade, many traders their Yuan first in “Tether”, a price stable crypto-currency, which is subject to different Bitcoin no large price fluctuations.
Chinese traders also use so-called “client-to-client” Trades. Often the specific exchanges that are structured as a normal Online Shop. This leads to a direct transaction between two traders, and not, as on many other Exchanges to market orders. For these Exchanges, however, is also an extensive “Know-Your-Customer” to comply with procedure. So many Chinese in exchange for their Fiat-money in the Tether, and can then start on other platforms, with the crypto-to-crypto trading. For that you use frequently, VPN Connections, since the Chinese government has blocked many of the Exchanges.
SCMP, there are currently no restrictions as to the use of VPNs in China, which offers a loophole for traders to be able to continue to Exchanges to access. However, the regulatory authorities work together with Payment providers to stop transactions associated with crypto-currencies.
Tether and VPNs
Chinese traders use to can as has already been said, Tether in conjunction with VPNs (Virtual Private Network) to continue on their usual Exchanges act. VPN can increase the anonymity when using the Internet. A VPN works by masking of IP addresses, so that the Online activities of crypto-traders are virtually difficult to track. The main advantage of using a VPN is that it secures the Internet connection of the traders. Not only that, through the use of VPN lines are encrypted, the data to be sent and protected from third parties. Crypto-currencies such as Bitcoin and Tether to provide data protection to the trade and Online payments and VPN provides security for the Online presence. With a combination of Tether and VPN crypto-traders hide their digital footprints.
As already mentioned, this is not the first Time that Tether is in the news. A few days ago, researchers at the Austin’s Division of Finance in the College of Texas published their research about this crypto currency. According to you, was manipulated by using Tether, Bitcoin and other crypto currency prices during the recent boom. The researchers used Algorithms to analyze the Blockchain data and found that a purchase by a Tether were placed after the Market declines and led to considerable increases in the price of Bitcoin. Their analysis focused on the investigation of possible Manipulation of Bitcoin and other major Cryptocurrencies. They also examined whether the growth of a linked crypto-currency, Tether, is driven primarily by investor demand or whether it will be made available to the investors in order to benefit from the rise in crypto-currency prices.
They also explained that less than 1% of the times are associated with high Tether transactions with 50% of the extreme rise of Bitcoin, and 64% of other Top crypto-currencies. The support lines below the round prices show asymmetric auto-correlations in the case of Bitcoin, pointing to incomplete Tether supports before the end of the month. These patterns are not due to the demand from investors to explain, but it is in line with the above-formulated hypothesis, that Tether is used to support the prices and to manipulate the crypto markets.
It was in the last few months, some speculation, that Tether is not, as claimed, actually, to really like 100% cash backed, or if it is supported, the money is only reserved in part, and not kept 100%.
These speculations are based on a series of troubling events with respect to the Tether in the years 2017 and 2018, as well as the strong correlation between Tether-Emission and the Bitcoin price.
If the topic of crypto-currency is new to you, please consider our “important tips” for crypto-newbies. Since safety is the most important thing, you might be interested also to “How do I secure my Kryptos”.
If you are interested in other interesting news, read are wants to revolutionize the way visas to the crypto market, or here what has been said by Dominik Schiener at the economic summit in 2018.
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This article was from English into German:
Christian Rehm
Christian RehmSenior IT Consultant and Crypto Enthusiast always in search of interesting news.
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