Error Causes Crypto Disruption

A day after the Senate Banking Committee grilled the head of Facebook’s Calibra on the dangers of their proposed cryptocurrency, it was reported that the company behind the stablecoin Tether, mistakenly minted $5 BILLION of the digital assets.

This more than doubled the amount in circulation.

From a central bank standpoint, just think what would happen to the US economy if the amount of money in circulation doubled. It would likely create massive inflation, making your dollar worth half as much.

This “mistake” drove down the trading price of Bitcoin which, for some, is a value marker in the cryptocurrency world.

It was actually a “fat finger” error by an employee that was quickly resolved.

Fat-finger-error

But it proves the fragility of the digital asset market at the present time.

https://www.wsj.com/articles/tethers-5-billion-error-exposes-crypto-markets-fragility-11563280121

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
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