Ripple claims the US is after USDT

The US government is "going after" stablecoin issuer Tether, according to Ripple CEO Brad Garlinghouse

Olumide Adesina•Monday, May 13, 2024•2 min read

The US government is “going after” stablecoin issuer Tether, according to Ripple CEO Brad Garlinghouse, and this might have an erratic effect on the cryptocurrency markets.
In an interview with the World Class podcast on May 10, Garlinghouse predicted that there will “100%” be another crypto-related black swan event, similar to the collapse of FTX and the following discovery of fraud committed by its management.

Without providing further details, he declared, “It is obvious to me that the U.S. government is targeting Tether.” He did not go so far as to label any potential U.S. action against Tether as the next black swan. Rather, he considered it an “interesting one to watch.”
The CEO of Ripple stated, “I see Tether as an important part of the ecosystem.” He continued by saying he had no idea how to foresee the effects that prospective regulatory action against Tether by the US would have on the cryptocurrency industry.
Later this year, Ripple will introduce a stablecoin denominated in US dollars. According to chief technical officer David Schwartz, the company will use dollar deposits, short-term government Treasurys, and “other cash equivalents” to support the token.
Tether Holdings Limited is the parent business of a network of globally formed companies with similar names, that are in charge of different aspects of the stablecoin Tether’s issuance and administration.
The Department of Justice was encouraged to “carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism” in a letter submitted by U.S. Senator Cynthia Lummis and Representative French Hill in October of last year.
In response to the letter, Tether stated that it was “fully committed” to cooperating with authorities worldwide and it had “always assisted law enforcement” when requested.
In recent years, the corporation has released quarterly third-party audits on its USDT-backed treasury, in response to criticism for its lack of openness regarding its backing reserves.
The Commodity Futures Trading Commission asserted that Tether “misrepresented to customers” its reserve holdings and discovered that it had enough fiat reserves to support USDT for “only 27.6% of the days” between June 1, 2016, and February 25, 2019. As a result, the regulator fined the company $41 million in October 2021.

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ABOUT THE AUTHOR See More

Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.