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A Bloomberg article made numerous claims against Tether, including that its chief financial officer Giancarlo Devasini has used the company's reserves to make investments, that seem to contradict Tether's public position that the holdings were fully backed at all times. In addition, the article alleges that Tether has invested in Chinese firms and issued crypto-backed loans "worth billions of dollars." Furthermore, Wall Street traders were canvased to see if any had ever seen any trades made by the company, which supposedly holds $30 billion in commercial paper short-term loans - suggesting the fact that none had seen any should raise eyebrows. Additionally, only one bank was located - in the Bahamas - that was working with the firm. Tether called the article "another tired attempt to undermine" the company, pointing to its recent quarterly report on its holdings to demonstrate that it is 100% backed, although not offering any detail on its asset holdings that would concretely refute the Bloomberg article's contentions.

Tether once backed its USDT stablecoin with commercial paper issued by Chinese firms, according to documents released by New York's Attorney General (NYAG). However, Tether says that all of those securities were rated A2 or better, for what that's worth. The NYAG released the documents in response to a freedom of information request from Bloomberg News, following an earlier unsuccessful request by CoinDesk. [The whole Bloomberg article is worth a read, as it details a number of other questionable USDT reserves management practices.]

"As well as the settlement with the CFTC and a $41 million fine this month (covered here two days ago), everyone's favourite stablecoin issuer, Tether Inc., had a front-cover story in Bloomberg Businessweek - confirming quite a few things that people like me have been saying over the past few years."

Senator Brian Schatz, a Democrat from Hawaii, may offer legislation that would have the effect of making currencies such as Libra illegal, according to a draft of the bill reviewed by Bloomberg. The legislation would amend a U.S. statute originally meant to prevent Americans from minting their own physical currencies. The amendment would also make it illegal for someone to create a digital currency, intended to be used as money, whose value is based on assets held in reserve.

Non-fungible token (NFT) prices are apparently crashing. NFTs are essentially blockchain-based tradable digital certificates that prove ownership and provenance of online assets. And I say "apparently" because the market is so illiquid and opaque, so this is being dubbed a silent crash. So according to Bloomberg, citing Nonfungible.com as a source, is saying that NFT prices have tumbled almost 70% from a peak in February. Amy Castor has posted a great explainer on NFTs, what they are and how their markets work, but suffice it to say that the whole thing looks very fishy!

The SPAC boom has attracted financiers, former politicians, athletes and celebrities willing to use their fame to attract retail and institutional investment. About 600 blank-check companies have raised more than $182 billion since the beginning of 2020, according to data compiled by Bloomberg. But family offices - the discrete, sometimes secretive firms that manage the affairs of the ultra-rich - have been one of the biggest driving forces.

Shenzhen digital yuan trial participants interviewed by Bloomberg showed little interest in switching from AliPay or TenPay, some balking at the possibility a digital yuan might give authorities easier access to real-time data on their financial lives. Some merchants may also be wary of their transactions flowing directly into a government database to help police tax collection compliance. The People's Bank of China has tried to quell those concerns by making the digital yuan free to use for merchants and by pledging that most payments will remain anonymous.

From the Bloomberg Editorial Board: "In the end, the legacy of the cryptocurrency craze might be a better form of money. If so, all the commotion - not to mention all the losses between now and then - will have been worth it."

Bank of Israel Deputy Governor Andrew Abir reportedly said that Israel has conducted a pilot test of a digital shekel central bank digital currency (CBDC). However, a more recent Bloomberg report implies that it's actually an Ethereum-based proof of concept test. https://www.jpost.com/jpost-tech/israel-has-already-tested-a-digital-shekel-cryptocurrency-671639

As Bitcoin rocketed above $23,000 for the first time this week, the mania pushed the price of the Bitwise 10 Crypto Index Fund as much as 650% above the value of its holdings and is currently trading near 350%, according to data compiled by Bloomberg. Meanwhile, the premium on the Grayscale Bitcoin Trust swelled to 34% amid the rally. For those investors looking for access to Bitcoin but who are reluctant or unsure how to get direct exposure, the ease of buying products like BITW or GBTC through a brokerage platform trumps the extra cost.

According to Bloomberg, the Central Bank of the Bahamas will roll out its Sand Dollar digital currency nationwide in October, after piloting the islands of Exuma and Abaco since December. The central bank will mint more Sand Dollars as demanded, at the same time removing physical currency out of circulation to prevent inflating the monetary supply. Once the system is up and running, holders will be able to use their mobile phones to make person-to-person or business transactions -- even when they're offline.

A Bloomberg reporter tells the story of how he tried to pay all his bills in El Salvador in Bitcoin using the Chivo wallet during a five-day visit. It didn't go so well. Only 10 of almost 50 businesses had taken his Bitcoin, amounting to $485 out of $1,700 he spent. And only four crypto transactions had been entirely seamless. He also paid $40 in Bitcoin fees, such as levies for transferring the currency between Coinbase and his digital wallet. His Visa, by contrast, paid him $20 in cash-back rewards.

Bank Negara Malaysia "is actively assessing the value proposition of central bank digital currency (CBDC) to Malaysia," it said in an email to Bloomberg. "While a decision has not been made to issue CBDC, we have focused our research on CBDC via proof-of-concept and experimentation to enhance our technical and policy capabilities, should the need to issue CBDC arise in the future." The central bank first signaled CBDC exploration intent in their 2020 annual report.

Circle, the issuer of USD stablecoin, is pushing forward with its plans to submit an application to operate as a U.S. crypto bank, CEO Jeremy Allaire told Bloomberg. If approved, the startup would be the fourth federally chartered crypto bank in the U.S. Allaire added that his company and the U.S. Office of the Comptroller of the Currency, which facilitates bank charters, have been talking about Circle's digital asset banking prospects among other related topics such as the interoperability between blockchains.

"The $11.4 billion Grayscale Bitcoin Trust has plunged more than 74% this year, outpacing the cryptocurrency's 64% decline. That gap has widened dramatically over the past week, dragging the price of GBTC to an unprecedented 42% discount to the value of the Bitcoin it holds, according to Bloomberg data. The dislocation is rooted in the fact that despite Grayscale's best efforts, US regulators have repeatedly denied applications to convert GBTC into a physically-backed exchange-traded fund -- a structure that the Securities and Exchange Commission has yet to approve, despite allowing the futures-backed ProShares Bitcoin Strategy ETF (BITO) to launch a year ago. In its structure as a trust, GBTC isn't able to redeem shares to keep pace with shifting demand, exacerbating its net-asset value discount while the derivatives-backed ETFs stay in lockstep with theirs. "

"On the most recent episode of the Odd Lots podcast, we reunited FTX Chief Executive Officer and crypto billionaire Sam Bankman-Fried with Bloomberg Opinion columnist Matt Levine, to talk about how people are making money in crypto right now. Matt asked Sam exactly how yield farming actually works."

Asian-based crypto exchange Zipmex has halted withdrawals as the fallout from a series of defaults spreads further throughout the digital-assets industry. As part of its story on Zipmex, Bloomberg produced a tabulation of crypto platforms with liquidity problems.

The Eastern Caribbean Central Bank (ECCB) DCash has been offline since January 14, and it could take several more days to fully restore service, bank officials told Bloomberg News. The "interruption" didn't compromise any data but it stopped all transactions. The problem was related to an expiring certificate on the version of the Hyperledger Fabric that hosts the DCash ledger.

Meanwhile, the Eastern Caribbean Central Bank's DCash, the CBDC used by seven Caribbean nations, has been down since January 14 and it's unclear when it will be back online. In an email to Bloomberg, Karina Johnson, a DCash project manager at the bank, said officials were working "around the clock" with their service provider Bitt "to re-establish full transaction capabilities."

"Speaking in an interview with Bloomberg News, Gensler said he's concerned that crypto exchanges aren't putting up proper walls between different parts of their businesses such as custody, market-making, and offering a trading venue. He said the "commingling" of services may not be in clients' best interests.  "Crypto's got a lot of those challenges-- of platforms trading ahead of their customers," Gensler said. "In fact, they're trading against their customers often because they're market-marking against their customers." "