Consumer protection group Consumers’ Research has criticized Tether for its ongoing lack of transparency regarding USDT reserves. Despite claims that USDT is backed 1:1 with the US dollar, Tether has delayed independent audits since 2017, raising concerns.
The watchdog’s report highlights Tether‘s $125 billion market cap and warns that its opacity could have severe consequences for the crypto industry, drawing parallels to the FTX collapse.
The report also pointed to Tether’s $6.5 billion in “secured loans” as a risk factor and urged the company to undergo an independent audit to address growing concerns.
Consumers’ Research has accused Tether of engaging with questionable entities and not preventing the use of USDT for evading international sanctions. To raise awareness, the group sent an open letter to U.S. state governors, launched radio ads, and created a website detailing these claims.
Despite the accusations, some prominent figures in the finance industry have defended Tether. Last month, Tether CEO Paolo Ardoino announced that the company has assisted over 145 law enforcement agencies in recovering $108.8 million in USDT tied to illegal activities since 2014.
Tether has also partnered with TRM Labs and Tron (TRX) to establish the “T3 Financial Crime Unit,” aimed at detecting and freezing illicit USDT transactions on the Tron network.
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