Consumers’ Research’s Will Hild Puts Spotlight On Non-Audited Tether
Consumer protection agency Consumers’ Research targeted Tether in a June 18 ad campaign that dubs the yet-to-be-audited blockchain platform “the next FTX.”
“Tether thrives in the shadows, refusing to be audited and constantly dodging fraud investigations,” a Consumers’ Research X claimed alongside a link to a website called TetheredToCorruption.com.
Tether Accused Of Illicit Crypto Activity By Consumers’ Research, Will Hild
The website features several negative claims about the British Virgin Islands-based company, including allegations of financing illicit crypto funding, bolstering organized crime, involvement in money laundering, terrorist financing, and sanctions evasions.
NEW: We're sounding the alarm on the threat so-called “stablecoin” @Tether_to poses to consumers and their suspicious business practices.
Tether thrives in the shadows, refusing to be audited and constantly dodging fraud investigations. https://t.co/CNdS5BUUMe
— Consumers' Research (@ConsumersFirst) June 18, 2024
“Given these warning signs, we fear that that Tether may very well be the next FTX,” Consumer’s Research Executive Director Will Hild stated. “Consumers should be weary of any so-called stablecoin that refuses to properly certify that they actually hold the assets they claim.”
Does Tether Really Have A Sufficient Reserve Of Assets?
The blockchain platform has long faced claims surrounding its lack of transparency, particularly concerns that it fails to have sufficient asset reserves.
Founded by “Mighty Ducks” star Brock Pierce in 1994, Tether has reportedly never been officially audited, prompting skepticism from critics of the stablecoin. Pierce is no longer affiliated with the company.
In lieu of full audits, which are conducted by an independent third party and take into account all company records, Tether relies on attestations typically executed by a hired financial firm under the purview of the examined organization.
Most recently, the crypto company announced that it had earned a record-breaking $4.52 billion in profit for the first quarter of 2024, with its total net worth supposedly estimated at $11.37 billion.
My summary Tether's Q1/2024 attestation. Another great quarter!
As of 31st March 2024:
– $4.52 Billion Profit for Q1/2024. ~1 billion in net operating profits, primarily derived from US T-Bills. The remainder derived from mark-to-market gains in Bitcoin and Gold positions.
-… https://t.co/kCBYQw9JGx— Paolo Ardoino 🤖🍐 (@paoloardoino) May 1, 2024
“Tether once again demonstrates its commitment to transparency, openness and conservative risk management, maintaining a large amount in excess reserves and providing disclosures for the Group,” said its CEO Paolo Ardoino.
Despite Tether’s seemingly large inflows, a January 2024 Fortune report showed that it still had an estimated $5 billion owed in total debt.
When asked by DL News why an audit had not been formally conducted on the blockchain platform, Ardoino claimed that “none of the big four” accounting firms would agree to one over reputational risks.
Should it be discovered that Tether does not have the assets it claims, it would usher in a devastating period of loss not just for Tether, but for the entire digital asset industry as a whole.
