Tether CEO Paolo Ardoino has responded to Ripple CEO Brad Garlinghouse’s claims that the US government is targeting USDT, without explicitly mentioning Ripple or Garlinghouse. Ardoino’s comments appear to address Garlinghouse’s concerns about the potential disruption of the cryptocurrency market due to scrutiny of Tether. It is worth noting that Ripple itself plans to launch its own USD-backed stablecoin in June.
In a post on X, Ardoino stated, “An uninformed CEO, leading a company being investigated by the SEC, launching a competitive stablecoin (cui prodest), is being reported spreading fear about USDT.”
Garlinghouse’s remarks coincide with concerns surrounding Tether, as it has been reported that terrorist organizations and countries facing economic sanctions, such as Russia, have allegedly used Tether to evade restrictions. Policymakers have also raised concerns about offshore stablecoins like Tether, citing potential connections to illicit financial activities. Stablecoins, which are tied to fiat currencies, have gained popularity in facilitating transactions within the crypto sphere, leading to scrutiny of issuer transparency and regulatory supervision.
In defense of Tether, Ardoino highlighted that USDt is the most widely used stablecoin globally, with hundreds of millions of users, particularly in emerging markets and developing nations. He emphasized the stability of the price, substantial liquidity reserves, reputable custodianship, and comprehensive compliance measures of USDt over time.
Ardoino also defended the company’s compliance record, providing statistics to demonstrate Tether’s history of cooperation with global law enforcement and adherence to regulations. He specifically highlighted Tether’s adherence to the OFAC/SDN lists (Office of Foreign Assets Control’s Specially Designated Nationals).
Furthermore, Ardoino stated 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 move came after Tether was fined $41 million by the Commodity Futures Trading Commission (CFTC) in October 2021 for misleading customers about its reserves. The CFTC found that Tether only had enough fiat currencies to fully back USDT for less than a third of the time between 2016 and 2019.