More than 10 million Paxos stable coins have been minted following the New York Attorney General’s bombshell allegations against the operators of rival stablecoin Tether.
The New York Attorney General recently released allegations against Bitfinex, providing evidence revealing how they lost $850 million in customer and corporate funds to an offshore Panamanian company by the name of Crypto Capital Corp.
It is alleged that the firm made attempts to cover their tracks by borrowing reserves from Tether, the company behind dollar-pegged stablecoin USDT.
Chad Cascarilla, the head of Paxos, claims that because of this, the company experienced an overnight surge in demand.
There was a lot of minting that happened throughout the day and overnight as well. I think that’s definitely a function of the news because PAX started trading at a very significant premium to Tether and the dollar.Chad Cascarilla, Paxos CEO
Conveniently, he attributes this to increased demand, adding:
We don’t pre-mint PAX, so the volume is going up or down based on market demand … and I have to assume it’s because of the Tether news.Chad Cascarilla, Paxos CEO
The developers of Paxos have used lines of code to mint more than 13,737,199.87 new PAX coins into existence according to blockchain data.
Traders Jumping Ship
Traders seem to be fleeing to other stablecoins in light of the recent NYAG allegations.
The operators of Tether have long claimed that each of the 3 billion circulating tokens are backed 1-to-1 by U.S. dollar reserves.
But it now seems that that these reserves are being treated as a personal slush fund by the operators of Bitfinex which, understandably, casts doubt on whether or not Tether truly has the required $3 billion USD in holdings.
In light of this, according to TokenAnalyst.io, other stablecoins are currently undergoing massive increases in volume.
Like the operators of Paxos, other development teams are now seizing the opportunity to make their stablecoins seem more attractive.
USDCoin, the Gemini dollar, TrueUSD, DAI and others have all boosted in value.