According to Bloomberg, 80 percent of USDT supply is controlled by about 300 accounts. Considering that Tether underpins much of cryptocurrency trading, deep-pocketed whales are able to easily meddle with the nascent market.
Alleged market manipulations
The damning statistics were revealed by Blockchain analytics startup Coin Metrics, which has estimated that only 318 addresses hold more than $1 mln worth of USDT.
There is a gated community of crypto whales that are able to manipulate cryptocurrency prices at a whim. To put this into perspective, Binance, the largest exchange by daily trading volume, has 40 percent of its transactions conducted with the help of USDT.
John Griffin, a finance professor from Texas who earlier shed light on the Bitcoin-Tether connection, believes that many crypto exchanges have skin in the game.
The concentration of Tether suggests that control of Tether is in the hands of a few central players who can swing Bitcoin prices, and have a vested interest in doing so. It also suggests that many exchange players have a vested interest in keeping the Tether game going, - Griffin told Bloomberg.
Bloomberg also recently suggested that Tether wants to obfuscate its transactions by migrating USDT to multiple Blockchains, such as EOS and Tron.
The flagship stablecoin issuer has been under intense scrutiny since the end of April after Bitfinex was accused of using Tether funds to cover up its loss of $850 mln.
However, when it comes to centralization, it is a universal problem for the whole cryptocurrency industry, which, ironically, makes a case for decentralization.