Crypto ATM Operator Postpones Tether Buying 'Until the Smoke Clears'

CoinFlip, a crypto ATM startup, had planned to add the Tron version of USDT to more than 180 of its machines, allowing people to buy the token for cash at convenience stores, gas stations and tobacco shops across the U.S. But according to Daniel Polotsky, co-founder and CEO of CoinFlip, this plan has been put on hold due to the NYAG's court case involving Tether, the issuer of the token, and Bitfinex, the cryptocurrency exchange with overlapping management and owners.

"We want to make sure Tether and Bitfinex are operating 100% lawfully before offering their products to our customers."

The reward program was postponed "Until there's more clarity regarding Bitfinex and Tether," Tron CEO Justin Sun tweeted Wednesday.

New York Attorney General Letitia James revealed last week that Tether had loaned more than $700 million to Bitfinex, because the latter was unable to access more than $800 million held at a payment processor.

As a result, the roughly 2.6 billion of USDT outstanding are now only 74 percent backed by cash and equivalents, as Tether's general counsel acknowledged.

Stepping back, Tether has issued USDT via Omni since 2014, but in recent years it's launched versions of the token on other networks.

The ethereum version of USDT debuted in 2017, and in March of this year, Tron and Tether announced their partnership.

Since April 16, Tether has issued 137.9 million of the dollar-pegged tokens on the Tron network.

"Tether is the largest stablecoin in the crypto world. Every USDT is backed up by, like, one USD actually in a reserve, so it's a fully backed USDT.".

Asked Tuesday if Tron received any proof of the USDT token's fiat backing from Tether, Tron spokesperson Cliff Edwards told CoinDesk the company trusts its partner.