In recent news of the cryptocurrency world, Tether is fleeing from banks while Ledger is facing criticism for a backdoor in their software.
Tether has been one of the more controversial cryptocurrencies in the market as it is closely linked to the US dollar. It is what’s called a stablecoin as it is pegged to the value of the dollar. Recently, Tether has been making headlines for different reasons. It has announced that it will no longer be working with its banking partner, Deltec. Deltec is based in the Bahamas and has been partnering with Tether for the past few years. Tether has not given a specific reason for ending their partnership with Deltec but some experts believe that the decision could have adverse effects on the value of the cryptocurrency.
Tether may end up having to find a new banking partner to continue operating. It is well known that cryptocurrencies in general do not have the most positive relationship with traditional banks, partly due to the lack of regulation and partly due to the risk associated with new technologies. Tether is no exception. However, the decision to end the partnership with Deltec means that Tether may have a harder time finding a compliant banking partner. This, in turn, could lead to a loss in investor confidence and a drop in the value of the cryptocurrency.
Another cryptocurrency company that has been in the news lately is Ledger. Ledger is a hardware wallet manufacturer that offers secure storage solutions for cryptocurrencies. The company has become a popular choice for investors looking for secure ways of storing their digital assets. However, it has recently come to light that Ledger may have a backdoor in its software that allows hackers to access the seed phrases of its users.
This is a significant security breach as the seed phrase is what’s used to unlock a user’s cryptocurrency wallet. With access to the seed phrase, hackers can steal a user’s digital assets with ease. The backdoor in question is specific to the Ledger Nano S model. This model runs on the STM32 microcontroller, which has a flaw that allows hackers to run unsigned code on the device.
Ledger has responded to the issue by releasing a new firmware update for the affected model that addresses the vulnerability. They have also stated that there is no evidence that the backdoor has been exploited by hackers to steal users’ digital assets. While the company has taken steps to fix the issue, some users have lost faith in the company’s ability to provide secure storage solutions. In this digital age, having secure storage solutions for cryptocurrencies is essential, and any breach can have catastrophic results.
In conclusion, the world of cryptocurrency is still in its early stages and is continually evolving. Tether’s decision to part ways with Deltec highlights the challenges that cryptocurrencies still face in interacting with traditional banking systems. On the other hand, Ledger’s security flaw sheds light on the importance of secure storage solutions for cryptocurrencies. With security breaches being a real threat to the digital asset universe, it is essential for companies to take measures necessary to prevent such occurrences. Despite the challenges, however, the world of cryptocurrency continues to grow, and with growth comes the need for more regulation, better security and greater transparency.
The world of cryptocurrencies and traditional banking seems to be at odds once again, with both sides seeking to reduce their exposure to the other. In the first quarter of 2023, Tether’s withdrawal of over $4.5 billion from banks was aimed at reducing counterparty risk following Circle’s troubles amid the Silicon Valley Bank collapse. Meanwhile, traditional banks are looking to reduce their exposure to the volatile crypto market.
In the midst of all this, Ripple has won a small victory in its battle with the U.S. Securities and Exchange Commission (SEC), with a U.S. judge rejecting the SEC’s motion to seal records of internal deliberations related to its case against Ripple. Ripple is currently defending against allegations that its XRP token sales violated U.S. securities law and has spent over $200 million in legal fees. The SEC’s motion to seal the records was seen as an attempt to prevent Ripple from relying on key evidence in its defense.
Stablecoin issuer Tether, which has faced allegations about its financial stability, recently released its audit report for the first quarter of 2023. The report showed that the company pulled over $4.5 billion out of banks, leading to a substantial reduction in counterparty risk. Tether’s USDT stablecoin has grown in market capitalization to over $82 billion, with over 85% of its reserves backed by cash, cash equivalents, and short-term deposits. Owned by Hong Kong-based iFinex, Tether was fined $18.5 million by the New York Attorney General’s office for misrepresenting the fiat backing of its reserves in 2021.
The Ledger wallet’s latest feature, Ledger Recover, has sparked discontent among the crypto community. The retrieval solution for hardware wallets offers a safeguard in case users lose their seed phrase, but the technique used has led some to believe it creates a backdoor into seed phrases. The community has expressed concerns over the data leak from Ledger in 2020, which exposed users’ personal information.
Amid all these developments, Worldcoin, co-founded by OpenAI CEO Sam Altman, is reportedly in advanced talks to secure $100 million in funding. Worldcoin is a project aimed at creating a global, collectively owned cryptocurrency. Its blockchain protocol is set to launch within the next six weeks after operating in beta, and the company recently launched its own gas-free crypto wallet for verified humans.
In other news, Cointelegraph analyst and writer Marcel Pechman explains how lower interest rates in the U.S. will ultimately benefit Bitcoin and the cryptocurrency market. Pechman examines Argentina’s economic crisis, where its local currency, the peso, has declined by 70% in the past few years, boosting the demand for U.S. dollars, gold, and BTC.
The ongoing tensions between the crypto market and traditional banking seem to persist, with both sides seeking to reduce their exposure to each other. However, as the market continues to grow and evolve, it remains to be seen how the relationship between these two sectors will develop.
