America’s oldest consumer protection organization says Tether needs to die
The post America’s oldest consumer protection organization says Tether needs to die appeared on BitcoinEthereumNews.com.
Tether might be a big name in the crypto industry, but it’s on shaky ground with America’s oldest consumer watchdog. Consumers’ Research is sounding the alarm bells loud and clear: they say it’s time for Tether to go, plain and simple. Stablecoins are supposed to be a safe space in the crypto chaos, pegged to stable assets like the dollar to prevent wild price swings. But while other stablecoins are getting the thumbs up, Tether’s practices are raising red flags from all corners. Source: X.com From the get-go, Tether has been a magnet for controversy. Started in 2014, the platform promised each Tether was worth one solid U.S. dollar, but it turns out, that wasn’t always the case, according to Consumers’ Research. Flash forward to 2018, and the New York Attorney General’s office began digging into Tether and its sister exchange, Bitfinex. They uncovered misrepresentations about their dollar reserves in 2017, and by 2019, the two were found falsifying their financial status after Bitfinex took a serious financial hit. Tether’s asset management under scrutiny The troubles didn’t stop there. In 2021, the U.S. Commodity Futures Trading Commission fined Tether a whopping $41 million. Why? Because for over two years, Tether had been playing fast and loose with the truth about their dollar reserves—fully backed only 27.6% of the time. Plus, they threw in some unsecured receivables and other non-fiat assets into the mix, all the while claiming they were conducting routine, professional audits—which, spoiler alert, they weren’t. CFTC Headquarters, Washington. Credits: Getty Images Questions about how Tether manages its reserves are still unanswered. An S&P report handed Tether four out of five for transparency and regulatory framework. And then there’s the issue of their past investments—loads of commercial paper and securities from major Chinese banks. Tether says they’ve cut ties…
Filed under: News - @ June 20, 2024 7:24 pm