Tether currently has a 75% market share of the entire stablecoin market. That’s great for businesses, but it also raises doubts and fears among many people. Could Tether cause an FTX-like implosion in the crypto market?
Concerns about Tether
According to Justin Bons, Tether is the biggest scam on earth.
“Tether is a $118 billion scam; bigger than FTX and Bernie Madoff combined! Tether does not do Proof of Reserves and the books have never been audited; USDT is printing fake money (fraud). Tether has been caught repeatedly for falsifying documents, hiding personal data and lying about reserves. Stop using USDT now!”, says a pretty furious Justin Bons.
As an example, he cites the $41 million fine Tether received in 2021 from the US Commodities and Futures Trading Commission (CFTC) for lying about its reserves.
However, it remains to be seen to what extent Justin Bons is right. In May 2022, Tether was able to honor $16.7 billion in USD withdrawals over a period of 10 days.
Major criticism of Tether
On September 8, Tether invested $100 million in Adecoagro, giving Tether a 9.8% stake in the Latin American agricultural giant.
This latest investment gave us our first insight into Tether’s governance structure. “The Tether Holdings board consists of only two members; Giancarlo & Ludovicos. This implies that the USDT reserves will still not be segregated in 2024 and that these two have absolute control,” says Justin Bons.
That could be, but in principle that is also allowed if it is a private company. There is no law that says that there has to be a different governance structure if your company has a market value of tens of billions of dollars.
But that doesn’t change the fact that they are the largest stablecoin issuer in the world and those are tokens that you want to be able to trust. That bit of trust is missing for some people, which is why people still don’t dare to trust Tether 100%.
Source: https://newsbit.nl/is-tether-een-tikkende-tijdbom-van-118-miljard/
