Published on september 22, 2024, 12:30 am
Image source: Fox News
```json [ "TLDR: Tether, the dominant stablecoin in crypto, faces scrutiny due to lack of audits and concerns about liquidity crisis. CFTC fined Tether $41 million for misleading claims. Market share at 75%, raising worries about its influence like FTX's collapse. Experts divided on Tether's future, with some highlighting risks of banking partner issues. Recent transparency efforts by investing in Adecoagro but governance concerns persist." ] ```
Tether, the leading stablecoin in the crypto industry, has seen its market share soar to over 75%, sparking concerns about its dominance. The lack of third-party audits for Tether has raised alarms among investors, fearing a potential liquidity crisis akin to what FTX experienced. Cyber Capital founder Justin Bons recently shared his worries, suggesting that Tether could be a larger scam than FTX.
In a significant development, the United States Commodities and Futures Trading Commission (CFTC) imposed a $41 million fine on Tether in 2021 for falsely claiming that USDT was fully backed by reserves. This incident has added to the growing unease surrounding Tether’s influence within the crypto sphere.
Recent data indicates that Tether’s market dominance has surged to 75% of the stablecoin market, marking a substantial increase over the past two years. Concerns have been amplified by memories of FTX’s collapse, which resulted in $8.9 billion in user funds being lost due to an inability to meet massive customer withdrawals promptly.
Notably, Sean Lee, co-founder of IDA Finance, highlighted that while FTX’s downfall stemmed from withdrawal issues, a hypothetical Tether crisis would likely stem from troubles with its banking partners. Despite this, some experts believe that Tether is too integral to fail. Anndy Lian, an authoritative voice in blockchain tech, expressed confidence in Tether but cautioned against the risks posed by large centralized entities such as it.
In a bid to enhance transparency, Tether recently invested $100 million in Adecoagro and acquired a notable stake in the agricultural giant. However, concerns persist about Tether’s opaque governance structure and its failure to undergo third-party audits despite claims of holding over $118 billion in reserves.
As discussions around Tether’s operations intensify within the crypto community, many are closely watching for further developments regarding its governance practices and potential implications for the broader cryptocurrency landscape.
Original article posted by Fox News
