Home Crypto people Ripple CEO: USA Is Targeting Tether

Ripple CEO: USA Is Targeting Tether

13 May, 2024 Crypto people

Ripple CEO: USA Is Targeting Tether

Ripple CEO Brad Garlinghouse has stated that it is "clear" the United States government is targeting stablecoin issuer Tether, which could have unpredictable effects on the crypto markets.

In a May 10 episode of the World Class podcast, Garlinghouse asserted that there would "100%" be another significant crypto event similar to the collapse and subsequent fraud uncovered in the FTX case.

"The U.S. government is going after Tether, that is clear to me," he remarked, without providing further details or suggesting that this would be the next major event. He called it "an interesting one to watch."

"Tether is a very important part of the ecosystem," Garlinghouse said, adding that he couldn't predict the potential impact of U.S. regulatory action against Tether on the crypto ecosystem.

Garlinghouse's comments come as Ripple plans to launch its own stablecoin in 2024.

Tether Holdings, the parent company, oversees a network of similarly named subsidiaries worldwide that handle various operations in issuing and managing the Tether USDT stablecoin, the world's largest by market capitalization.

In October 2023, U.S. Senator Cynthia Lummis and Representative French Hill urged the Department of Justice to "carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism."

Tether responded, stating it had "always assisted law enforcement" when asked and was "fully committed" to continuing to work with authorities globally.

Bloomberg reported in November 2022 that New York-based U.S. Attorney Damian Williams had taken over an earlier Justice Department investigation into Tether's alleged concealment of crypto-linked funds from banks it used to transfer cash.

The company has also faced criticism for its lack of transparency regarding the reserves backing USDT. In recent years, Tether has published quarterly third-party audits.

In October 2021, Tether paid a $41 million fine to the Commodity Futures Trading Commission, which found that Tether "misrepresented to customers" its reserve holdings and had sufficient fiat reserves to back USDT for "only 27.6% of the days" between June 1, 2016, and February 25, 2019.

Sources:

https://cointelegraph.com/news/us-government-going-after-tether-ripple-ceo-claims

https://www.youtube.com/watch?v=55q7PnOAIeI

https://www.bloomberg.com/news/articles/2022-10-31/tether-bank-fraud-probe-gets-fresh-look-by-justice-department

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