{"id":17146,"date":"2024-09-20T15:49:20","date_gmt":"2024-09-20T12:49:20","guid":{"rendered":"https:\/\/forklog.com\/en\/tether-faces-renewed-criticism-over-transparency-and-business-structure\/"},"modified":"2024-09-20T15:49:20","modified_gmt":"2024-09-20T12:49:20","slug":"tether-faces-renewed-criticism-over-transparency-and-business-structure","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/tether-faces-renewed-criticism-over-transparency-and-business-structure\/","title":{"rendered":"Tether Faces Renewed Criticism Over Transparency and Business Structure"},"content":{"rendered":"<p>Concerns about Tether&#8217;s transparency and business structure evoke memories of the FTX collapse, according to a thread by Cyber Capital founder Justin Bons.<\/p>\n<blockquote class=\"twitter-tweet\" data-conversation=\"none\">\n<p lang=\"en\" dir=\"ltr\">2\/17) The potential for collapse here is greater than Terra Luna!<\/p>\n<p>Making it one of the biggest existential threats to crypto as a whole<\/p>\n<p>As we have to trust they hold $118B in collateral without proof!<\/p>\n<p>Even after the CFTC fined Tether for lying about their reserves in 2021\u2026 <a href=\"https:\/\/t.co\/KoJFbyjRj1\">pic.twitter.com\/KoJFbyjRj1<\/a><\/p>\n<p>\u2014 Justin Bons (@Justin_Bons) <a href=\"https:\/\/twitter.com\/Justin_Bons\/status\/1834994434900984096?ref_src=twsrc%5Etfw\">September 14, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>&#8220;[Tether] <\/em>\u2014<em> one of the biggest existential threats to cryptocurrencies as a whole. We have to trust them, and they hold $118 billion in collateral without proof! Even after the <span data-descr=\"U.S. Commodity Futures Trading Commission\" class=\"old_tooltip\">CFTC<\/span> <\/em><em>fined Tether<\/em><em> for lying about their reserves in 2021,&#8221; <\/em>wrote the entrepreneur.<\/p>\n<\/blockquote>\n<p>Bons also noted that the <a href=\"https:\/\/u1f987.com\/en\/news\/tethers-net-profit-reaches-5-2-billion-in-first-half-of-2024\">stablecoin<\/a> issuer has yet to conduct an audit of its reserves.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>&#8220;However, the \u2018<\/em><a href=\"https:\/\/u1f987.com\/en\/news\/tethers-net-profit-reaches-5-2-billion-in-first-half-of-2024\"><em>auditor&#8217;s report<\/em><\/a><em>\u2019 or \u2018accountant&#8217;s report\u2019 is not an official document! Despite claims, Tether has never provided its alleged reserves for a real unrestricted third-party assessment,&#8221;<\/em> the expert expressed indignantly.<\/p>\n<\/blockquote>\n<p><a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1499505\/000110465924090580\/tm2421820d1_sc13d.htm\">The purchase by the organization<\/a> of a 9.8% stake in the Latin American agricultural giant Adecoagro for $100 million in September revealed its management structure.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>&#8220;The board of directors of Tether Holdings consists of only two people: Giancarlo [Devasini] and Ludovicos [Jan Van der Vende]. This means that in 2024, USDT reserves are still not segregated. These two have absolute control!&#8221;<\/em> commented Bons.<\/p>\n<\/blockquote>\n<p>In a comment to <a href=\"https:\/\/cointelegraph.com\/news\/tether-transparency-business-structure-118b-ftx-concern\">Cointelegraph<\/a>, IDA Finance co-founder Sean Lee also expressed concerns about the company&#8217;s lack of transparency:<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>&#8220;Tether is structured as a business, and its persistence in refusing detailed transparency, which would ensure real trust from the community and institutional players, is indeed concerning.&#8221;<\/em><\/p>\n<\/blockquote>\n<p>According to <a href=\"https:\/\/www.coingecko.com\/en\/categories\/stablecoins\">CoinGecko<\/a>, USDT&#8217;s share of the stablecoin market has exceeded 75%, amplifying such concerns. Over two years, this figure has grown by 20%.<\/p>\n<p>Lee noted that a hypothetical collapse of the issuer could arise due to its banking partners.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>&#8220;The possibility of Tether&#8217;s collapse is linked not so much to market movements as to its structural connection with underlying assets and <span data-descr=\"traditional finance\" class=\"old_tooltip\">TradFi<\/span>. Otherwise, USDT would have suffered during the latest downturn. But instead, <\/em><em>USDC experienced a depeg<\/em><em> due to its reliance on<\/em><em> Silicon Valley Bank<\/em><em> and<\/em> <em>Signature Bank<\/em><em>,&#8221;<\/em> the specialist explained.<\/p>\n<\/blockquote>\n<p>The publication recalled the token&#8217;s resilience amid market turbulence. This was confirmed during the <a href=\"https:\/\/forklog.io\/ctejblkoin-ust-kratkovremenno-utratil-privyazku-k-dollaru-ssha-na-fone-ottoka-aktivov-iz-anchor\/\">UST&#8217;s decoupling from the USD in May 2022<\/a>, when Tether converted 10 billion USDT into fiat within a week (over 12% of the supply at that time).<\/p>\n<p>This contrasts with the situation surrounding <a href=\"https:\/\/ru.wikipedia.org\/wiki\/Washington_Mutual\">Washington Mutual in 2008<\/a>. The institution ceased operations after depositors withdrew $16.7 billion in deposits over 10 days.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-1218.webp\" alt=\"1-1218\" class=\"wp-image-241568\"\/><figcaption class=\"wp-element-caption\">Largest U.S. bank bankruptcies. Data: Pew Research Center.<\/figcaption><\/figure>\n<p>Intergovernmental blockchain expert Anndy Lian did not share his colleagues&#8217; views. He does not expect Tether to face issues. In his opinion, large centralized structures may pose a risk to the industry.<\/p>\n<p>In September, the company responded to previous comparisons with FTX and Alameda Research by the consumer advocacy group Consumers\u2019 Research. The USDT issuer emphasized its commitment to customer protection and regulatory compliance.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Concerns about Tether&#8217;s transparency and business structure evoke memories of the FTX collapse, according to a thread by Cyber Capital founder Justin Bons. 2\/17) The potential for collapse here is greater than Terra Luna! Making it one of the biggest existential threats to crypto as a whole As we have to trust they hold $118B [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":17145,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[83,36,1245],"class_list":["post-17146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-business","tag-regulation","tag-tether-usdt"],"aioseo_notices":[],"amp_enabled":true,"views":"116","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/17146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=17146"}],"version-history":[{"count":0,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/17146\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/17145"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=17146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=17146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=17146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}