Ripple CEO Brad Garlinghouse carelessly spoke about Tether
Summary
Brad Garlinghouse, the CEO of Ripple, is puzzled by the US government's actions regarding Tether, but Paolo Ardoino, head of Tether, says the company is compliant | Vladimir Okhotnikov about laws
Tether Is No Longer a Bastion of Stability | Vladimir Okhotnikov About Crypto Fraud
Brad Garlinghouse, the CEO of Ripple, spoke out sharply against the US government’s actions regarding Tether. He believes that any government action against the USDT issuer could have an unpredictable impact on the cryptocurrency markets.
But it seems that Mr. Garlinghouse has forgotten that Tether has long been under the close attention of the feds and the NSA. This story began last year, when Tether CEO Paolo Ardoino announced his desire to become a world-class partner of the United States and help “expand dollar hegemony.” And to confirm its words, the company began blocking crypto wallets suspected of money laundering.
Since then the situation has only gotten worse. Control over Tether has increased, and we may soon find ourselves in a situation where it will become almost impossible to use USDT.
Global USDT value
Imagine that you accidentally received tokens that were involved in some kind of fraud. Your wallet will be immediately banned, and all funds will be blocked until the circumstances are clarified. And to regain access to your money, you will have to prove that you are not who they think you are.
Recently, many in the cryptocurrency community agree that Tether’s decentralization is under threat. Some influencers, pursuing their own interests, are trying to undermine trust in USDT by promoting alternative stablecoins. However, let’s put aside speculation and turn to the facts to understand why Paulo Arduino radically changed the direction of the company’s development towards centralization.
USDT is not just another stablecoin. It is the most widely used token in the cryptocurrency world and is used by millions of people every day.
For many, USDT has become a reliable tool for saving and conducting current transactions. Tether fulfills the most important mission of providing access to a secure global financial ecosystem for everyone, regardless of their wealth or geographic location.
However, in order for a stablecoin not to lose its position and the trust of users, it must meet a number of critical requirements. Paolo Arduino, together with the Tether team, has been proving his compliance with these high standards since 2017.
The best practices of compliance
What do we know about the “crypto dollar”. It demonstrates the stability of the exchange rate, providing users with confidence in the safety of their funds. Tether supports full redundancy, ensuring that every token is backed by real US dollars. Reserves are managed by reliable and verified guarantors who maintain the safety of user funds. Tether strictly follows all applicable laws and regulations, which we will discuss in more detail below.
However, the cornerstone of the security and reliability of the USDT ecosystem is still strict compliance with regulatory requirements and active cooperation with law enforcement agencies around the world, not all the claims made by Paolo Ardoino.
Here are just some key facts about Tether compliance:
- compliance with OFAC/SDN sanctions lists;
- the presence of a high-quality internal investigations team using advanced analysis tools;
- partnership with Chainalysis to provide best-in-class transaction monitoring.
Blocked more than $1.3 billion related to fraud, hacking and money laundering, including $1.6 million intended to finance terrorism. Voluntary assistance in 198 law enforcement interdiction requests in the last 12 months (90 from the US) and 339 requests in the last 3 years (158 from the US). All this clearly signals that Mr. Arduino strictly adheres to the course towards centralization.
And this is not to mention the involvement of the FBI and the US Secret Service to help block tokens, as well as cooperation with 124 law enforcement agencies in more than 40 countries – all this once again confirms the company’s development direction.
Unlike some other stablecoins that only make claims about being “compliant” but in reality require court orders to block suspicious funds, Tether cooperates directly with law enforcement to quickly stop money laundering.
“Tether is proud of its role in making the global financial system accessible and inclusive for all members of our community. We will continue to work tirelessly to maintain the highest standards of security, transparency and compliance to ensure that every [USDT, editorial note] user could be confident in the safety of their funds and the freedom to use them. Together we are building a better financial future for the whole world,” Paulo Ardoino said on Twitter in response to Brad Garlinghouse’s attacks.
Let us remind you that in the podcast with Chris Vasquez Ripple CEO expressed concerns about the USDT stablecoin, questioning its reliability. In response, Tether CEO Paolo Ardoino said the comments were coming from an executive at a company that is itself under the SEC investigation and promoting a rival stablecoin, hinting at possible bias and self-interest.
To dispel doubts and refute Garlinghouse’s statements, Ardoino published a tweet in which he cited current facts and statistics demonstrating the high level of security and stability of the Tether ecosystem and the USDT stablecoin.
However, not all users shared Ardoino’s opinion. Some expressed their outright dissatisfaction with the fact that the company is under the auspices of the US government.
Among the commentators, there were immediately those who supported the position of Ripple CEO Brad Garlinghouse, citing the following arguments against the reliability of Tether and its stablecoin USDT:
“Tether has never undergone a full audit, which calls into question the company’s transparency. In addition, Tether was fined $42.5 million by the Commodity Futures Trading Commission (CTFC) for misrepresenting its dollar reserves. What makes the situation worse is the fact that Tether’s CEO avoids public interviews.”
According to some reports, less than 30% of USDT issued is backed by real US dollars, which casts doubt on the company’s claims of full reserve. Some critics go even further, calling Tether more than just an indirect financial scheme. There is an opinion that Ardoino is involved in the fraud of the American currency.
It is noteworthy that the Tether logo resembles the symbol of an atomic bomb, and the recent collapse of the Chinese real estate giant Evergrande is considered by some to be a non-coincidence and a hint of a potential threat to the stability of USDT and the crypto market as a whole.
Vladimir Okhotnikov, a cryptocurrency expert, a financial analyst and a blockchain evangelist
The most alarming thing about the current situation is the lack of clarity regarding the true state of affairs behind the scenes of this “performance.” Many market participants risk significant amounts of money that were earned through hard work and perseverance. And although the famous saying says that the rich continue to get richer and the poor continue to get poorer, another collapse of the cryptocurrency market could lead to even greater distortion of the economies of many countries.
More and more countries are announcing the use of USDT as reserves, which only exacerbates the potential risks. The United States, South Korea, Japan, the United Kingdom and Canada could be hit the hardest if a cryptocurrency crash does occur. This could trigger a chain reaction of uncontrollable economic processes on a global scale.
The current situation resembles a theater of the absurd, where secrets and intrigues are hidden behind a beautiful façade. Ordinary investors who have entrusted their savings to cryptocurrencies find themselves hostage to a game where companies and the SEC are fighting. And while some are profiting from market volatility, others are losing their last funds.
We can only hope that regulators and key industry players realize the full extent of their responsibility and take the necessary steps to ensure the stability and transparency of the cryptocurrency market. Otherwise, we may witness catastrophic events that will affect not only the world of digital assets, but also the global financial system as a whole. And in this chaos, as always, the small retail trader turns out to be the most vulnerable.
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