2023-10-21 17:45 |
Paolo Ardoino, Tether’s incoming CEO, said the stablecoin issuer plans to publish real-time attestation of its reserve starting next year, Bloomberg reported on Oct. 20.
Tether, due to its significant role in the cryptocurrency industry, has faced increasing pressure to enhance transparency regarding the reserves backing its USDT stablecoin, a digital asset pegged to the U.S. dollar. USDT is a crucial player in the cryptocurrency industry, commanding approximately 67% of the stablecoin market and ranks as the most traded digital asset in the sector, according to CryptoSlate’s data.
Following regulatory scrutiny from the U.S. Commodity Futures Trading Commission (CFTC) and a $41 million fine in 2021, Tether began publishing quarterly updates of its reserves, which some critics still find inadequate. Its most recent quarterly attestation shows that the stablecoin issuer has an excess reserve of up to $3.3 billion.
Since 2022, the demand for increased transparency has reached new heights following the collapse of Terra’s algorithmic UST stablecoin and the recent U.S. banking crisis that its rival USD Coin (USDC) was exposed to.
Additionally, reports suggest that Sam Bankman-Fried’s now-defunct crypto trading firm, Alameda Research, may have minted around $40 billion in USDT supply. Witnesses against Bankman-Fried, including former Alameda CEO Caroline Ellison and former FTX CTO Gary Wang, have testified that Alameda enjoyed and “unlimited” borrowing arrangement with FTX, raising substantial questions about the origin of the funds used to mint Alameda’s USDT.
Tether has publicly maintained that it remains fully backed. However, market observers argue that its disclosures should help investors better assess potential risks and scrutinize the auditors’ relationship with the company.
In the most recent quarterly report, Ardoino emphasized the company’s commitment to transparency, saying:
“We believe that open communication and strong financials foster trust and reliability, and this is what the global community deserves especially in a year devastated by many failures across the banking and crypto industry.”
Tether has yet to respond to CryptoSlate’s request for comment as of press time.
The post Incoming Tether CEO Paolo Ardoino promises real-time reserve transparency beginning 2024 appeared first on CryptoSlate.
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