Today KuCoin temporarily closed deposits and withdrawals of Tether (USDT), which might have caused the stablecoin’s dramatic plunge down to about $0.92. Currently, USDT is on rebound at $0.97 per token, according to Coinmarketcap
According to the official announcement made by KuCoin at 2 AM UTC+0, its users would temporarily be unable to deposit or withdraw USDT due to wallet system maintenance. This news might have started a wave of critique targeted at Tether, particularly its sore spot that never failed to get mentioned — the insufficient audit of collateral reserves.
Another possible cause of the sudden plunge is the rumored delisting of USDT pairs by Binance accompanied by an obviously fake screenshot of Binance’s announcement:
The origin of the rumour and image is unknown but that did not matter and about three hours ago USDT dropped to $0.92, according to Coinmarketcap, which has been the consequence of the massive FUD-fueled sell-off of USDT.
Learned today, short term, launching a fiat exchange that required months of work had less positive impact than FUD about USDT (a single photoshopped fake announcement) on BTC price. But I also know for a fact, long term, hard work wins. Keep building!— CZ Binance (@cz_binance) October 15, 2018
Meanwhile, KuCoin brought back all USDT operations, according to the tweet of about six hours ago (6:11 AM UTC+0), which some Twitter users deemed suspiciously coincidental.
According to reddit user galan77, this Tether plunge was caused by a whale-scale purchase of BTC. For a focused discussion, visit the reddit thread.
In the past Tether did have fluctuations of similar magnitude but quickly stabilized. Three months ago USDT reached the all-time high of $1.32. The recent plunge did not go below the all-time low of $0.91 that happened last year in April. Currently, Tether is climbing back at $0.97 per token.