It’s ‘clear’ the US government is going after Tether: Ripple CEO

As a seasoned crypto investor with a keen interest in the latest developments within the industry, I find Brad Garlinghouse’s comments both intriguing and concerning. The potential regulatory action against Tether could indeed have an unpredictable impact on the market, given its significant role as the world’s largest stablecoin by market capitalization.

According to Brad Garlinghouse, the CEO of Ripple, it’s evident that the US authorities are taking a firm stance against stablecoin issuer Tether. This possible regulatory action might bring about unexpected consequences in the cryptocurrency market.

In a recent interview on the World Class podcast, published on May 10, Garlinghouse predicted with certainty that there will be another shocking incident related to cryptocurrencies, similar to the fraud discovery involving FTX’s executives.

As a financial analyst, I can confirm that the U.S. government’s intentions towards Tether are becoming more apparent, albeit without providing specific details. It remains to be seen how this situation unfolds and what potential implications it may have on the market; an intriguing development to keep an eye on.

As an analyst, I consider Tether to be a significant component of the cryptocurrency landscape. However, I cannot accurately forecast the consequences of potential US regulatory actions against Tether for the broader ecosystem.

Garlinghouse’s comments come as Ripple is planning to launch its own stablecoin this year.

It’s ‘clear’ the US government is going after Tether: Ripple CEO

As a researcher, I would describe it this way: I’ve discovered that Tether Holdings Limited serves as the umbrella organization for an intricately linked network of subsidiaries, each bearing similar names and based in various parts of the world. These entities are entrusted with diverse functions related to the creation and administration of Tether (USDT), which currently holds the title of the largest stablecoin by market capitalization.

Last October, U.S. Senators Cynthia Lummis and French Hill penned a missive to the Department of Justice, requesting a thorough examination of whether Binance and Tether were extending significant assistance or resources in the facilitation of terrorism activities.

As a crypto investor, I can tell you that Tether, in response to the letter, has stated that they have consistently helped law enforcement agencies whenever requested to do so. They are also fully dedicated to continuing their collaboration with authorities around the world.

In November 2022, according to Bloomberg’s report, Damian Williams, the Manhattan-based US Attorney, assumed control of a previous investigation led by the Justice Department regarding allegations that Tether had hidden cryptocurrency funds while transferring money between banks.

As a financial analyst, I’ve noticed that there have been concerns about the company’s openness with regard to its reserve backing for its USDT stablecoin. In response to these criticisms, the company has taken steps to increase transparency by releasing quarterly audits of its USDT-backing treasury, conducted by third parties.

In October 2021, Tether was penalized $41 million by the Commodity Futures Trading Commission (CFTC) for providing false information to customers regarding its reserve holdings. According to the CFTC’s investigation, Tether had enough traditional currency reserves to cover its USDT digital tokens for just 27.6% of the days between June 1, 2016 and Feb. 25, 2019.

Later in 2021, Ripple intends to introduce a US dollar-pegged stablecoin. This was revealed by Ripple’s chief technology officer, David Schwartz, during an interview with CryptoMoon last month. He explained that the value of this digital token would be maintained through dollar holdings, short-term government securities, and other liquid assets.

2024-05-13 08:07

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