Regulation News on Tether: Exposing Stablecoin Risks
Concerns Over Tether's Audit Practices
Renowned advocacy organization Consumers’ Research raised concerns about Tether, criticizing the issuer of the USDT stablecoin for exposing users to significant risks due to its business model. Despite these concerns, Tether has recently emerged as one of the most profitable crypto companies globally, reporting massive quarterly profits.
Consumers’ Research's Critique
In a letter aimed at protecting consumers, addressed to Washington Governor Jay Inslee, Consumers’ Research criticized Tether for failing to conduct an audit to prove that its USDT stablecoin is backed 1:1 by the US dollar, despite promises dating back nearly 10 years. The report described this failure as a serious risk, calling Tether and USDT a potential threat to investors.
Key Points Raised
- Tether's profitability despite audit concerns
- Risks associated with unstable backing of USDT
- Potential impact on consumer trust in stablecoins
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.