But could the biggest threat to the industry actually come from the biggest stablecoin by market capitalization – namely Tether (USDT)? Several dozen Reddit users seem to think so, in response to this post titled – Tether: The Biggest Risk of Cryptocurrency – that was published Sunday in the CryptoCurrency subreddit.
In the post, its author cites 24 bulleted points of questionable conduct exhibited by Tether founders, developers, and leaders dating back to 2014. The article also draws correlative price increases between Bitcoin and Tether, which the writer claims links them – so if one falls in price, it’s likely they both will somehow fall. The piece also notes that Tether has total assets of $75 billion and only 25 employees – the employee number couldn’t be verified on the Tether.io website – but if true, that might make it easier to collude and commit fraud. However, no proof of criminal activity was provided in the article other than circumstantial links and anecdotes.
So as additional background, here is a list of recent anti-Tether articles in mainstream media.
If USDT was the only stablecoin available, it might be concerning but USDT is fungible thanks to USD Coin, Binance USD, Dai, and other staked asset projects.
Furthermore, even if criminal or civil financial penalties are levied against Tether, it’s likely to reach a negotiated settlement well before it reaches a conviction. There’s simply too much at stake for that organization to stonewall the Department of Justice. The allegations against the former executives will never go to trial, that’s why plea bargains exist.
And lastly, Secretary Yellen and Federal Reserve bankers are bashing stablecoins for one reason – the government’s monetary monopoly is threatened. For the government to say stablecoins are a “systemic risk” to the existing money system is laughable. The greater risks are runaway money printing, reckless deficit spending, and quantitative easing.
To be crystal clear, there is no place in the crypto-space for bad actors, criminal activities, and fraud. But it’s very unlikely that the Tether investigation and potential criminal prosecution will result in far-reaching ramifications for broader cryptocurrencies.
On The Flipside:
Why You Should Care?
Circle’s USDC has been the fastest-growing stablecoin of 2021, but it’s still second behind USDT in market cap. The negative media avalanche against Tether could not have happened at a better time for a Circle IPO.
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Source: Cryptocurrency - investing.com
