Tether CEO Paolo Ardoino fired back at Ripple after the company’s CEO alleged the US government is going after USDT.
Ardoino didn’t directly mention Ripple or its CEO Brad Garlinghouse. But his comments likely refer to Garlinghouse’s earlier statement expressing concern that scrutiny into Tether could disrupt the cryptocurrency market. Interestingly, Ripple is planning to launch its own USD-backed stablecoin in June.
“An uniformed CEO, leading a company being investigated by the SEC, launching a competitive stablecoin (cui prodest), is being reported spreading fear about USDT,” Ardoino said in a post on X on Monday.
An uniformed CEO, leading a company being investigated by the SEC, launching a competitive stablecoin (cui prodest), is being reported spreading fear about USDt.
Let me give you an update on Tether USDt ecosystem safety.
USDt is the most used stablecoin in the world, with…
— Paolo Ardoino
(@paoloardoino) May 13, 2024
Ripple didn’t return Cryptonews’ request for comment by press time.
Tether Scrutinized for Transparency and Sanctions Concerns
Garlinghouse’s remarks come amid concerns surrounding Tether. According to TRM Labs, terrorist organizations and countries facing sanctions, like Russia, purportedly used Tether to evade US economic restrictions.
Further, policymakers have expressed concerns about stablecoins issued offshore, like Tether. They have cited potential connections to illicit financial activities. Stablecoins, which are tied to fiat currencies, have gained popularity for facilitating transactions within the crypto sphere. This has led to scrutiny over issuer transparency and regulatory supervision.
Tether CEO Highlights Anti-Illicit Activity Efforts and Regulatory Compliance
In Tether’s defense, Ardoino highlighted that USDt is the most utilized stablecoin globally, boasting hundreds of millions of users, particularly in emerging markets and developing nations. He emphasized that USDt has consistently demonstrated robust price stability, substantial liquidity reserves, reputable custodianship, and comprehensive compliance measures over time.
He also defended the company’s compliance record. The exec provided statistics to show Tether’s history of working with global law enforcement and following regulations. Specifically, he emphasized Tether’s adherence to the OFAC/SDN (Office of Foreign Assets Control’s Specially Designated Nationals) lists.
He added that Tether has blocked more than $1.3b in potentially illicit funds since its inception. The vast majority is linked to scams, hacks, and money laundering, with a smaller amount (around $1.6m) flagged for possible terrorist financing.
Tether has faced criticism in the past for not being transparent about the assets backing USDT. However, it has taken steps to address this concern. In recent years, it begun publishing quarterly audits conducted by independent third parties.
This shift came after a Oct. 2021 incident when the Commodity Futures Trading Commission (CFTC) fined Tether $41m for misleading customers about its reserves. The CFTC found that Tether only had enough traditional currencies (fiat) to fully back USDT for less than a third of the time between 2016 and 2019.
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