Ripple CEO Foresees US Government's Targeting of Tether, Predicts Unpredictable Impact on Crypto Market
Summary:
Ripple CEO Brad Garlinghouse has suggested that the US government may be targeting Tether, a leading stablecoin issuer, which could lead to unpredictable outcomes for the crypto markets. His comments emerge as Ripple itself plans to release its own stablecoin. As Tether is currently under scrutiny from global authorities for various reasons, including a lack of transparency about its reserve backing, these statement imply significant ramifications for the broader crypto world.
Ripple's Chief Executive Officer, Brad Garlinghouse, has openly stated that he believes the US government is targeting Tether, a prominent stablecoin issuer. This could potentially shake up the crypto markets in an unpredictable way, according to Garlinghouse. Speaking on a World Class podcast episode aired on May 10, he confirmed that another unforeseen event connected to cryptocurrency, such as the fall and subsequent exposure of fraud within FTX’s leadership, is expected. Garlinghouse didn't reveal more information about his assumptions on the US government's actions against Tether, choosing to label it as "an interesting case to observe."
Emphasizing the significance of Tether within the crypto environment, the Ripple CEO confessed uncertainty in forecasting the potential repercussions of possible US regulatory measures against Tether on the broader crypto world. These statements appear as Ripple prepares to release its stablecoin later this year.
Tether Holdings Limited, the parent company with several worldwide subsidiaries responsible for issuing and managing the stablecoin Tether (USDT) — the largest stablecoin by market cap, is under scrutiny.
In late 2021, US Senator Cynthia Lummis and Representative French Hill prompted the Department of Justice to verify if Binance and Tether were assisting terrorism in a letter. Responding, Tether assured its commitment to cooperating with global authorities and vowed to assist law enforcement as required.
In relation to Tether’s suspected hiding of crypto-related capital from banks, Bloomberg reported in November 2022 about the takeover of an earlier investigation by Damian Williams, a Manhattan-based U.S. Attorney. Concurrently, Tether has received backlash for its opaque nature about its reserve backing. Recently, it has begun to publish quartile third-party audits of its USDT-backing treasury. Tether ended up paying a fine of $41 million to the Commodity Futures Trading Commission in October 2021 as it was found "misrepresenting to customers" regarding its reserve possessions.
Later this year, Ripple is set to introduce a US dollar stablecoin. Cointelegraph was informed last month by Ripple's chief technology officer, David Schwartz, that dollar deposits, short-term government bonds, and "other cash equivalents" would support their token.
Published At
5/13/2024 8:03:45 AM
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