Tether Under Fire: Stablecoin Giant’s Opaque Finances Spark Market Jitters

Another day, another dollar-backed controversy—except Tether’s dollars remain as mysterious as ever.

The $83B stablecoin behemoth faces fresh scrutiny over its reserve management and audit practices. Critics claim USDT’s ’full backing’ promises smell fishier than a Wall Street boiler room.

Market dominator or ticking time bomb? With 70% of crypto trades relying on USDT, the industry holds its breath—while traditional finance snickers about ’stablecoins’ needing constant reassurance.

Ongoing Doubts About Tether’s Reserve Security

Tether operates as the issuer of the USDT stablecoin, pegged 1:1 to the US dollar, making it a crucial element of the cryptocurrency ecosystem with a market value of approximately 150 billion dollars. Deso’s analysis, however, suggests the presence of a debt-based structure behind circulating USDT. This implies that the fundamental trust mechanism crucial to cryptocurrency investors might be at risk.

The analyst identifies major trading companies like Abraxas, Cumberland, and Wintermute as central to this cycle. These companies allegedly purchase USDT with borrowed capital, convert it to assets like Bitcoin (BTC)$103,039, liquidate them, and repeat the cycle. This leaves the system vulnerable to collapse if prices fall or demand diminishes, leading to unpayable debts.

El Salvador’s Move Raises Fresh Concerns

Another highlight from Deso includes Tether’s decision to relocate its headquarters to El Salvador. The lack of an extradition agreement with the US could pose challenges in potential investigations. This shift has fueled speculation about a “planned move,” further heightening transparency concerns surrounding the largest stablecoin issuer.

Moreover, Deso claims that control over the 150 billion USDT supply rests solely with Giancarlo Devasini, one of Tether’s founders. Blockchain tracking tools like Arkham Intelligence reveal that Devasini manages a massive reserve.