Crypto Exchange Bitfinex Facilitates Margin Trading In Tether

A blog post published by Bitfinex suggests that the cryptocurrency exchange has started allowing margin trading in Tether (USDT), the controversial stable coin.

At present, the HongKong-based exchange is offering margin trading in USDT/USD pair, which would supposedly result in better price discovery and also facilitate clients to hedge the stable coins risk.

The post further states that USDT will be available as collateral for margin trading, in addition to a dedicated lending market.

Even though margin trading in stable coin is presently limited to USDT/USD pair, the exchange intends to introduce margin trading for other stable coin pairs once sufficient liquidity is achieved.

Back in December, Bitfinex and its offshoot Ethfinex started listing four major USD-backed stable coins namely USDC, True USD (TUSD), the Gemini dollar (GUSD) and Paxos. This is in addition to Ethereum-backed DAI and USDT that are already traded against the US dollar.

Prior to that, in November, Bitfinex was subjected to scrutiny by the US Department of Justice (DoJ) in relation to alleged price rigging in cryptocurrency market. The agency investigated whether USDT played a major part in inflating Bitcoin (BTC) prices during its eye popping rally last year.

The DoJ was also scrutinizing the manner in which Tether releases its new tokens in the market and why the majority of those tokens enter through Bitfinex. The investigation was a part of wider enquiry into whether any known market tricks were responsible for the crypto price rally.

Notably, both Bitfinex and Tether were subpoenaed by the US regulators for unexplained reasons in December 2017. The investigation was started over doubts about Tether’s claim that it is pegged to the US dollar on a 1:1 ratio.