- Brad Garlinghouse warned of impending enforcement action against Tether.
- Tetherโs CEO wrote off the claim as fear-mongering.
- Ripple is planning to launch a competing stablecoin product.
Tether has carved out a dominant position as the world’s leading stablecoin provider, with USDT boasting the highest trading volume and largest market capitalization. However, the company has faced persistent doubts over the years, particularly on the matter of its reserves being sufficient to cover all of the tokens it has issued.
Playing on these doubts, Ripple CEO Brad Garlinghouse recently warned that Tether is currently under investigation by US authorities. However, Tether CEO Paolo Ardoino has since pushed back, dismissing Garlinghouseโs claim as intentional fear-mongering and malicious misinformation from a rival.
Tether is Number 1 For a Reason: Ardoino
Ardoino fired back at Garlinghouse by deriding his comments as baseless fear-mongering from an “uninformed CEO,” whose own company is currently engaged in a high-profile legal battle with the Securities Exchange Commission (SEC).
Sponsored
Doubling down, the Tether chief asserted that USDT has rightly earned its status as the leading stablecoin thanks to its proven track record, solid backing from top-tier custodians, and robust compliance measures, which included respecting OFAC sanctions lists, training investigators monitoring blockchain activity, and working hand-in-hand with law enforcement agencies globally to stamp out criminality.
Ardoino also emphasized USDT’s vital role in underbanked emerging markets, where millions rely on the stablecoin for spending and saving.
Turning the tables, the Tether boss alleged that Garlinghouse’s alarming statements were likely motivated by Ripple launching a competing stablecoin product, with the comments being an attempt to undermine Tetherโs reputation.
Industry-Wide Risk
Garlinghouseโs alarming statements about Tether came from a recent interview in which he expressed concerns about the impact of a US authorities’ Tether probe. The Ripple boss stated that the crypto industry has demonstrated a high degree of resilience following the imprisonment of Sam Bankman-Fried and Changpeng Zhao.
However, Garlinghouse warned that another โblack swanโ type event is inevitable, with US investigations into Tetherโs operations a foreseeable event that worries him the most.
"The US govt is going after Tether. That is clear to me," claimed Garlinghouse.
Given that Tether is deeply rooted across the crypto ecosystem, Garlinghouse expressed apprehension about the potential industry-wide impact of any major regulatory actions against the stablecoin.
On the Flipside
- Garlinghouse did not provide a source for his claim that the US government is coming for Tether.
- The SEC has objected to Ripple‘s plans to launch a stablecoin.
- Tether offers near real-time data on its circulating tokens and quarterly audited reports on its reserves.
Why This Matters
Tether’s persistent challenges have highlighted the stablecoin industry’s struggles to establish credibility and build public trust amid increased scrutiny. Although an SEC probe into Tether remains unconfirmed, such an investigation may be disastrous given USDT’s roots across the market.
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