Tether CTO: „USDT will not be the next target of the US Securities and Exchange Commission“.
Paolo Ardoino reiterates that there is no reason for the SEC to now sue Tether after Ripple.
Paolo Ardoino, the chief technical officer (CTO) of crypto company Tether, is fighting back against speculation that the company’s stablecoin USDT could be the next target of the US Securities and Exchange Commission (SEC).
In a reply to Ki Young Ju, managing director of the market research institute CryptoQuant, Ardoino accordingly wrote on Twitter that Tether strictly follows the Crypto Profit requirements of FinCEN, the agency for combating financial crime, which in turn belongs to the US Treasury Department. Accordingly, such claims would merely be an attempt to stir up „FUD“, i.e. fear and doubt.
Ki Young had written in his original tweet: „If the SEC targets Tether next, it would be very, very bad for the current uptrend as it is very much supported by USDT.“
Reminder: #Tether is registered and regulated under FinCEN as all the centralised competitors. Strict KYC/AML is applied to all Tether direct users, as the other main issuers are doing. Less regulated is just FUD. Ask yourself who benefits from spreading such misinformation? https://t.co/0izlgpJ75r
– Paolo Ardoino (@paoloardoino) December 30, 2020
Although Ardoino rightly points out that Tether is following anti-money laundering (AML) and information collection (KYC) requirements, he does not address Ki Young’s central criticism, which suggests that the stablecoin may violate securities law. Especially if Tether’s dollar reserves are not as high as stated, there could be a violation.
In 2019, the New York Attorney General had published a legal assessment stating that Tether and its sister company, the crypto exchange Bitfinex, had jointly engaged in unlawful securities trading. According to the assessment, the two companies allegedly lent USDT to investors without it being fully covered by US dollars.
Tether’s USDT stablecoin, which is said to be only loosely linked to the US dollar, has been the subject of critical scrutiny for several years
As a reminder, stablecoins are cryptocurrencies that are supposed to maintain their namesake stability of value by being linked to an external asset such as a national currency.
In 2018, finance professor John Griffin had concluded in a study that USDT was even used to manipulate or bring about Bitcoin’s (BTC) record run in 2017.
Both Tether and Bitfinex were questioned by the US derivatives trading regulator (CFTC) in 2018 to determine whether the USDT was indeed fully hedged in US dollars. It was not possible to conclusively prove any wrongdoing on the part of the two firms.
Many members of the crypto community are eager to see which stone will fall next after the SEC brought charges against XRP operator Ripple for unauthorised securities sales. However, Ripple still has a chance to prove otherwise in court. For this reason, the crypto payment service provider asks its investors not to jump to conclusions.