Tether CEO Paolo Ardoino has responded to Ripple CEO Brad Garlinghouse’s claims that the US government is targeting USDT, without directly mentioning Ripple or Garlinghouse. Ardoino’s comments seem to allude to Garlinghouse’s concerns about the potential disruption of the cryptocurrency market due to scrutiny of Tether. It is worth noting that Ripple plans to launch its own USD-backed stablecoin in June.
Ardoino criticized Garlinghouse, referring to him as an “uninformed CEO” whose company is being investigated by the SEC, and accused him of spreading fear about USDT. Ripple did not respond to requests for comment.
Garlinghouse’s remarks come at a time when there are concerns about Tether’s transparency and its potential involvement in illicit activities. TRM Labs has reported that terrorist organizations and countries facing sanctions, such as Russia, may have used Tether to evade US economic restrictions. Policymakers have also expressed concerns about offshore stablecoins like Tether, citing their potential links to illicit financial activities. Stablecoins, which are tied to fiat currencies, have gained popularity for facilitating crypto transactions, leading to increased scrutiny over issuer transparency and regulatory oversight.
In defense of Tether, Ardoino emphasized that USDt is the most widely used stablecoin globally, with millions of users, particularly in emerging markets and developing nations. He highlighted USDt’s consistent price stability, substantial liquidity reserves, reliable custodianship, and comprehensive compliance measures. Ardoino also defended Tether’s compliance record, providing statistics to demonstrate its cooperation with global law enforcement and adherence to regulations. He specifically mentioned Tether’s compliance with the OFAC/SDN lists.
Ardoino noted that Tether has blocked over $1.3 billion in potentially illicit funds since its inception, with the majority linked to scams, hacks, and money laundering, and a smaller amount flagged for possible terrorist financing.
Tether has previously faced criticism for its lack of transparency regarding the assets backing USDT. However, the company has taken steps to address this concern by publishing quarterly audits conducted by independent third parties. This change came after a fine of $41 million imposed by the CFTC in October 2021 for misleading customers about its reserves. The CFTC found that Tether had sufficient fiat currency reserves to fully back USDT for less than a third of the time between 2016 and 2019.
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