[ad_1]
Tether’s CTO has dismissed the WSJ’s investigative report calling it a “clown article”. The report highlights the massive concentration of USDT control in the hands of the few.
On Thursday, February 2, the Wall Street Journal published an investigative report highlighting the highly polarized distribution of USDT control by the founders of Tether. This is another report in years of allegations against Tether, which operates the world’s largest USDT stablecoin with $68 billion in circulation.
The document references a 2021 investigation into Tether by the New York Attorney General as well as the Federal Commodity Futures Trading Commission. An investigative report from the WSJ reveals a previously unknown ownership structure of Tether.
As said, stablecoin USDT Tether is the largest stablecoin in the world and a key piece of infrastructure in the crypto world. The USDT stablecoin is the most widely used digital asset to be exchanged for other cryptocurrencies.
As per documents from the WSJ, Tether was started as a separate company led by former child actor Brock Pierce and former plastic surgeon Giancarlo Devasini. Devasini was also the man who helped build the crypto exchange Bitfinex and is currently its chief financial officer. As per the documents, Devasini himself owned 43% of Tether shares in 2018.
Two other executives from Bitfinex and Tether – Chief Advisor Stuart Hoegner and CEO Jean-Louis van Der Velde – each owned a 15% stake in the stablecoin issuer at the time. The fourth owner is a businessman known as Christopher Harborne in England who controls 13% of Tether.
Questions Concerning the Stability of Moorings and Their Control
This isn’t the first time questions have been raised about Tether’s stability. Various reports in the past have claimed that Tether does not have sufficient reserves to support the liquidity of all the outstanding USDT assets.
While the founders of Tether have denied all accusations in the past, the founders have not been forthcoming about how they operate. But despite some accusations against the company, Tether has weathered the crypto carnage in the past. Citing the company’s latest disclosures, the Wall Street Journal reports:
“Tether assets slightly exceed the value of tether in circulation, so it has only a slim cushion against losses. Rising interest rates have likely created a multi-billion dollar windfall for Tether owners, but the volatility in crypto markets raises questions about the stability of tethers.”
Last year, stablecoin USDT Tether was de-pegged from USD on two occasions. One during the Terra collapse in May 2022 and the other during the FTX exchange collapse in November 2022. Bith was a time of massive drawdown in the crypto space. However, the USDT stablecoin has recovered its stake since then.
Commenting on the WSJ article, Tether CTO Paolo Ardoino noted that “the more clown articles, the more moorings grow. People understand that Tether supports freedom and inclusion. This disappointed MSM. In the end the hole punch will also damage the media”.
Next
Bhushan is a fan of FinTech and has a good flair for understanding financial markets. His interest in economics and finance drew his attention to the emerging Blockchain Technology and Cryptocurrency markets. He is constantly in the learning process and keeps himself motivated by sharing the knowledge he has acquired. In his spare time he reads thriller fiction novels and sometimes explores his culinary skills.
[ad_2]
Source link
