Ripple CEO says “clear” harassment of Tether by US authorities

What’s new? The head of the fintech company Ripple, Brad Garlinghouse, has announced the harassment of Tether by US authorities. Tether is the issuer of USDT, the largest centralized US dollar-pegged stablecoin, and is third in terms of capitalization behind BTC and ETH with over $111,2 billion. According to Garlinghouse, possible government action against Tether could spark disruption across the crypto ecosystem.

World Class podcast

What else is known? The statement by Ripple’s senior executive follows another accusations against Tether by the US authorities. In April, Treasury Deputy Secretary Wally Adeyemo emphasized the growing use of alternative payment methods to circumvent economic restrictions during a speech before the Senate Banking Committee.

“We’ve seen Russia increasingly turning to alternative payment mechanisms — including the stablecoin tether — to try to circumvent our sanctions and continue to finance its war machine,” Adeyemo noted.

Tether has previously been repeatedly accused of facilitating illegal transactions. Last October, the US Senate claimed Tether was involved in raising funds for Hamas, earlier this year the UN named USDT one of the most popular money laundering tools in Southeast Asia.

TRM Labs: 1,6% of USDT volume was linked to criminal activity in 2023

The volume of illegal transactions with the asset amounted to $19,3 billion

Read more

In response to such statements, Tether emphasizes its commitment to fighting illegal financial activity in the crypto space in cooperation with law enforcers around the world. The company has taken the initiative to freeze all USDT addresses from the US Department of the Treasury’s sanctions list and blocks new ones as they are added to it. Since May this year, Tether has also started monitoring the USDT secondary market.

Tether will start monitoring the USDT secondary market to prevent illegal transactions

Monitoring will be carried out using the company’s Chainalysis tool

Читать дальше

USDT remains the leader in its segment, even though its share of the total volume of stablecoins on centralized crypto exchanges (CEXs) has fallen from 82% to 69% since the beginning of 2024. At the same time, the company recorded a record net profit of $4,52 billion in Q1.

Tether is actively expanding its business, in April this year it reorganized and launched four separate divisions: Tether Finance for USDT management and financial services, Tether Data for development and strategic investments in innovative technologies, Tether Power for bitcoin mining and Tether Edu for educational services.

Tether has been investing up to 15% of its profits in bitcoin every month since last May. According to Bitcoin Treasuries, it holds 75 354 bitcoins worth over $4,7 billion at current prices.

Brad Garlinghouse, assessing the situation around Tether, called the US authorities’ harassment of the company “clear”.

“I view Tether as a very important part of the ecosystem and I don’t know how to predict the impact it would have on the rest of the ecosystem,” the Ripple CEO emphasized.

Deutsche Bank says there are risks of Tether’s monopoly on the stablecoin market

The USDT issuer responded by saying that the report lacked sufficient data to support such claims

Read more

Late last year, Wally Adeyemo allowed the possibility of foreign issuers of stablecoins to be banned in the US to combat sanctions violations and money laundering. One such issuer is Tether, the company is registered in the British Virgin Islands.