Tether Transparency and Business Structure Raise Industry Concerns

Tether market share of more than 75% of the entire stablecoin market has raised concerns about Tether's influence on the crypto industry.Justin Bons, founder of Cyber Capital, is concerned that Tether could be a bigger scam than FTX.Bons wrote in a X post on Sept. 14, Bons wrote that Tether is one of the biggest existential threats facing cryptocurrencies as a whole. Because we have to believe that they hold $118 billion in collateral, and it provides no evidence of that. Even after the CFTC fined Tether for misrepresenting its reserves in 2021. Back in 2021, Tether was fined $41 million by the U.S. Commodity and Futures Trading Commission (CFTC) for falsely claiming that USDT was fully backed by reserves. Sean Lee, co-founder of IDA Finance, said that while the collapse of FTX was due to its inability to honor a massive $6 billion in customer withdrawals in three days, the assumption is that Tether's collapse had something to do with its banking partners. “Bear market or not, the likelihood of a Tether collapse lies more in its structural connection to its underlying assets and banking than in market volatility. Otherwise, USDT would have suffered in the last bear market, but in reality, USDC decoupled due to its dependence on SVB and Signature Bank.”