• Tether’s CEO deletes his Twitter account as the company faces increased scrutiny

  • Tether, the stablecoin issuer, is facing increased scrutiny from regulatory authorities as they try to understand its cash reserves, business framework, and other aspects.

    Tether Speculations

    This year, Tether has released 48 billion USDT, which are said to be worth $1 each. However, it remains unclear whether the firm has sufficient financial backing to support the issuance. Also, how would they handle it if all stablecoin owners decided to cash out their investments at the same time?

    There is widespread speculation that Tether is holding documents from Chinese firms. It would explain why Wall Street is unaware of Tether. Tether, on the other hand, becomes extremely risky as China appears to be in financial trouble.

    Tether’s legal action has been unraveling over the last few months; however, just a few hours ago, the CEO of Tether deleted his Twitter account.

    More trouble is on the way.

    Reporter Zeke Faux made several claims against Tether in a Thursday report. They also stated that its chief economic officer, Giancarlo Devasini, has been dipping into the company’s reserves. He is said to have made investments. This action appears to contradict Tether’s public assertion that the holdings were fully backed at all times.

    Tether, according to Faux, has yet to reveal where it keeps its money.

    “If Devasini is willing to take the risk of earning even a 1% return on Tether’s total reserves, he and his partners would profit $690 million per year.” However, if even a small portion of those loans fail, one Tether will be worth much less than $1.”

    Only yesterday, US Deputy Attorney General Lisa Monaco announced the formation of a task force led by the DOJ. It is cracking down on crypto entities such as exchanges and manipulators.

    Tether has denied the claim.

    Tether characterized the report as a “tired attempt” to threaten the company using innuendo and misinformation. The stablecoin issuer put Faux’s sources to the test in order to discredit Giancarlo Devasini and Tether executives. He maintained that its USDT tokens are completely backed, citing quarterly assurance records.

    Tether and Bitfinex agreed in February to pay New York state $18.5 million in damages and provide detailed reports on their funds. Tether filed the most recent audit with details reported since June 30 as part of a settlement with the New York Attorney General’s Office. Tether was accused by authorities of misrepresenting the extent to which its USDT tokens were backed by fiat collateral.

    Many people are wondering if Evergrande Group, China’s second-largest property developer, will default on $300 billion in financial debts. Tether, according to Faux, denied holding any financial obligation from Evergrande. They would not, however, confirm whether it contained commercial paper from other Chinese companies.

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