- Stablecoin Issuer Tether was accused by Consumers’ Research that it lacked transparency.
- Tether has not yet responded to the accusations outlined by the firm.
Web3 and cryptocurrency consider transparency their cornerstone and crucial for the decentralization motto. Additionally, within the sector, every firm aims to provide a transparent environment to its users and investors alike. Recently, leading stablecoin issuer and cryptocurrency institution, Tether has encountered a crossroads receiving accusations regarding its transparency.
Notably, the non-profit organization Consumers’ Research published a report on September 12 that highlighted Tether’s alleged lack of transparency. According to the issued warning, the organization doubted Tether’s dollar reserves and stated that the Tether borrowers don’t meet their payment obligations.
Consumers’ Research stated in its report:
“U.S. consumers should be deeply troubled by Tether’s long history of shady practices, false claims, legal entanglements, and seemingly deliberate lack of transparency.”
Additionally, the firm also referred to S&P Global Agency’s 2023 rating, on which Tether scored 4 out of 5, where 5 stands for the worst rating. One of the representatives of the agency also noted that Tether did not have any supervision or authoritative body for its investment and reserves.
Besides these accusations, Consumers’ Research also said the stablecoin issuer refuses to be audited independently or audit itself. Furthermore, it also quoted several incidents from over the years when Tether was investigated for alleged violations.
Is Tether Rectifying its Transparency Situation?
Tether has maintained silence until the time of writing, for Consumers’ Research’s accusations. However, recently, the institution announced a partnership with TRON, and TRM Labs to initiate a Crime Unit that aims to combat crimes in cryptocurrency.
Moreover, Tether also recently hired Chainalysis’s chief economist, Phillip Gradwell as Head of Economics. This was done to elicit USDT usage reports as per the official announcement. Separately, the firm has also announced several partnerships and crypto initiatives in the past few months.
However, the institution’s silence to the accusation is concerning as it can result in regulatory scrutiny as well. Relatedly, the US SEC, in the past day received a settlement from yet another crypto firm, eToro. On the other hand, SEC chair Gary Gensler finds himself in a tough spot being subjugated to court procedures regarding biased political hiring.
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