Tether, the crypto too close to the “dollar king”

Posted on Nov 6, 2021, 10:31 AMUpdated Nov 6, 2021, 10:33 AM

The stable crypto Tether has come too close to the “sun king” of currencies, the dollar, and it has burnt its wings. Its ambition to lean on the world’s leading currency by all means and without the backing of the United States has already cost it dearly in terms of fines and reputation. She even achieved the feat of dethroning bitcoin as the number 1 public enemy of American regulators. It must be said that its sprawling network of companies, from Panama to the Cayman Islands, via Puerto Rico and Hong Kong, does not facilitate its supervision, or even its surveillance.

In October, the regulator of the American futures markets (Commodity Futures Trading Commission or “CFTC”) sentenced the stable crypto (“stablecoin” or crypto convertible into currency) to a fine of 41 million dollars for having lied about its reserves. To ensure the stability of its value, Tether must, like other stable cryptos, have low-risk assets (government securities for example) as collateral. The CFTC judges that for almost three years (2016-2018), the reserves were sufficient only almost one day in four.

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