Tether audit issues uncovered by Consumers’ Research
Consumers’ Research, a well-known advocacy organisation, has raised serious concerns about Tether (CRYPTO:USDT), the issuer of the USDT stablecoin, criticising it for a lack of independent audits and transparency.
The group claims that Tether's business practices expose users to significant risks, describing the stablecoin as a “disaster for consumers waiting to happen.”
In a letter addressed to Washington Governor Jay Inslee, Consumers’ Research criticised Tether for failing to conduct an audit proving that USDT is backed 1:1 by the U.S. dollar.
Despite promising audits for nearly a decade, Tether has not yet delivered.
The organisation cited Tether’s CEO, who in August 2022 stated that an audit was “likely months away.” However, years later, no such audit has been conducted.
The group argued that Tether’s “continual failure to undergo an independent audit raises a distressing red flag for the company and its USDT product.”
The report also highlighted Tether’s history of dealing with questionable entities, such as sanctioned exchanges Garantex and BitPapa.
Additionally, it referenced a Wall Street Journal article that accused Tether of “enabling a parallel economy that operates beyond the reach of U.S. law enforcement.”
Tether has also faced legal issues, including an investigation by the U.S. Department of Justice for market manipulation and fines from the New York Attorney General and the Commodity Futures Trading Commission (CFTC) over misleading statements.
Despite these controversies, Tether remains highly profitable.
In 2023, Tether’s earnings exceeded those of asset management giant BlackRock, with $6.2 billion in earnings compared to BlackRock’s $5.5 billion.
Crypto analyst Frederik Lund explained, “You give them dollars. They give you Tether tokens, which are essentially entries on the blockchain. They use your dollars to buy U.S. bonds yielding 5%. They use the yield to buy Bitcoin for their balance sheet.”
This simple but effective model has made Tether a lucrative business, despite ongoing concerns and scrutiny.
In a recent legal development, a UK court ruled that Tether’s USDT stablecoin qualifies as property, following the UK Parliament's move to recognise cryptocurrencies and NFTs as personal property.
Meanwhile, Tether's CEO, Paolo Ardoino, has stated that the company relies on attestations and is seeking an auditor from among the top global accounting firms, though the Big Four are reportedly hesitant to engage due to potential reputational risks.
At the time of reporting, the Tether (USDT) price was $1.00.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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