Tether announced the burning of 11.1 billion USDT in accordance with the organization's periodic token burn. This is the amount of user assets withdrawn from the company in the past period.

On the morning of June 21, via the official Twitter page, Mr. Paolo Ardoino, CTO of Tether company announced that the platform is burning a large amount of stablecoins.

Specifically, Mr. Ardoino said the organization will burn 6.6 billion USDT on the TRC20 network and an additional 4.5 billion USDT on the ERC 20 network. This is one of the largest token burns Tether has ever conducted.

“The amount of tokens burned is in the treasury wallet, the result of a buyback in the past period. Stablecoins in this wallet address are not considered circulating and need to be burned periodically,” said Paolo Ardonio.

This is not the first time Tether has announced the destruction of tokens. Most recently, in early May, the company also burned about 3 billion USDT on the platform.

Unlike other cryptocurrencies, Tether's stablecoin USDT operates on the principle of collateral. 1 USDT will be generated when a user deposits 1 USD of fiat into the platform. When in need, customers can bring 1 USDT to Tether and ask for 1 USD in return. The stablecoin, after being acquired by the company, will be transferred to the treasury wallet and periodically destroyed.

The unusually high amount of USDT burned in this phase is due to a lot of negative information targeting Tether recently, making investors worried about the reputation of this platform. Specifically, after the disaster of the stablecoin UST, belonging to the Terra network, users lost confidence in the stable advertised asset classes.

Tether's USDT coin differs from UST in principle of operation, using collateral instead of a mint/burn algorithm to keep the price. However, a large amount of Tether's reserve assets are not available and are invested in many categories.

Therefore, users are worried that the company's business will be at a loss, not guaranteeing enough refund as promised. In mid-May, there was a period when USDT dropped in price, staying below the $1 mark for several days because of a sell-off.

According to data from Coinmarketcap, the market capitalization of USDT has dropped from $83 billion in early May, to $67 billion today. More than $16 billion worth of Tether's market cap evaporated in almost 2 months. This amount of assets is equivalent to the amount of money investors have withdrawn from the organization in the past period.
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