Consumer advocacy group Consumers Research has released a report criticizing stablecoin issuer Tether’s lack of transparency regarding its US dollar reserves, calling it “a disaster waiting to happen for consumers.”
The report argues that the main problem is that Tether has not had a full audit by a reputable accounting firm of its dollar reserves backing USDT, a 1:1 USD stablecoin. There is.
In response to a request from Decrypt, Tether did not provide a statement, but pointed to a series of quarterly certifications (check out the latest here) and daily transparency updates, and how its security measures and existing Decrypt They pointed out the relationship and pushed back on the surveillance report. Law enforcement.
Consumers’ Research compares this situation to the events that led to the collapse of FTX and Alameda Research.
“Tether has many of the same problems that FTX and Celsius had before their collapse, costing consumers billions of dollars by using deceptive and misleading marketing strategies that contradict the truth. may be giving away,” the watchdog group said in its report.
Consumers’ Research also claims that Tether conducts transactions with questionable entities and does not prevent the use of USDT to circumvent international sanctions. To spread awareness, Consumers Research sent an open letter to every state governor in the United States, launched radio ads, and created a website detailing its claims.
However, there are some prominent figures in the financial industry who are defending USDT issuers.
“From what we’ve seen (…) they have We have the funds to make the case.”
Tether itself says it has taken steps to commit to transparency and combat illegal activity. In July, the company hired former Chainalysis chief economist Philip Gladwell to produce USDT usage reports for U.S. regulators and investors.
Just last month, Tether CEO Paolo Ardoino announced that since 2014, the company has assisted more than 145 law enforcement agencies in recovering $108.8 million in USDT related to illegal activities. announced. And Tether recently partnered with blockchain intelligence platform TRM Labs and layer 1 network Tron (TRX). Creates a “T3 Financial Crimes Unit” whose purpose is to identify and freeze illegal USDT transactions on the TRON network.
Edited by Stacey Elliott.
Editor’s note: This article was updated after publication to include a response from Tether.
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