Controversial stablecoin issuer Tether has launched its promised “CNHt” coin, which is designed to act as a cryptographic proxy of offshore Chinese yuan (CNH).
The coin will run as an ERC-20 token on the Ethereum network.
Offshore Chinese yuan (CNH) added to our basket of supported currencies, new stablecoin CNHt now available!
CNHt is pegged to CNH and is available on the Ethereum blockchain as an ERC-20 token. https://t.co/MEWUw171ky pic.twitter.com/R7lN7ADPFb
— Tether (@Tether_to) September 9, 2019
CNHt was first announced in Chinese media by Zhao Dong, a Chinese crypto investor and Bitfinex shareholder who promised in August that the coin would go live via his China-based cryptocurrency trading platform, RenrenBit.
Bitfinex is the sister exchange of Tether. The two company’s parent company, iFinex, is now being investigated by the NYAG for alleged fraud for allowing Tether to lend Bitfinex $650 million USD from its reserves.
The loan was made after authorities in Panama seized of $850 million USD in Bitfinex funds from an alleged “shadow banking” partner, CryptoCapital.
That seizure reportedly led to a crunch on operating funds at Bitfinex, but the NYAG alleges that the loan was not disclosed to investors in a timely way.
Crypto Capital boss Reginald Fowler was arrested in Arizona April 30th and charged with bank fraud, operation of an unlicensed money transmitting business and conspiracy for allegedly providing “shadow banking” to several cryptocurrency exchanges.
iFinex et al have been plagued by rumours of malfeasance for years, but Tether has nonetheless maintained overwhelming market share in USD proxy coins.
Scott Purcell, CEO and founder of PrimeTrust, has explained Tether’s resilience as a matter of crypto trading markets having no alternative.
Regarding CNHt synthetic yuan, Purcell commented:
“I am extremely skeptical of this new issuance by Tether. Unless the stablecoin is fully-reserved, with assets held in trust by a qualified custodian and subject to third-party audit by an independent and respected accounting firm, then the risk of fraud is almost certain.”
There may nonetheless be a market for Tether’s synthetic offshore yuan.
A recent story in Coindesk claims that tethers have supplanted Bitcoins as the remittance cryptocurrency of choice for Chinese merchants doing business in Moscow.
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