Stuart Hoegner, the long-time general counsel of Tether and Bitfinex, has stepped down from the firm amid ongoing uncertainties surrounding USDT’s compliance with European Union crypto regulations.
Hoegner Retires, Hilliard Steps In to Lead
Stuart Hoegner retired from the general counsel position for Tether and its sister company Bitfinex on Thursday, where he served since 2014. Hoegner owns around 13% of Tether, which generated $6.2 billion in profit in 2023.
Sponsored
Michael Hilliard, the current Tether’s legal counsel, will succeed him as the head of legal for both companies, overseeing legal operations during increased regulatory scrutiny.
Tether Faces EU Compliance Challenges
The shift in legal leadership at Tether coincides with the rollout of the Markets in Crypto Assets Regulation (MiCA) in EU countries, which took effect on December 30.
This new legal framework imposes stricter rules on stablecoin issuers, requiring them to obtain an EU-based Electronic Money Institution (EMI) license, adhere to stringent regulatory and capital standards, and maintain liquid reserves for instant redemption. Additionally, stablecoin issuers must hold 60% of their reserves in low-risk banks.
With the new rules, uncertainty has emerged for stablecoin issuers like Tether, as it remains unclear whether its US dollar-pegged stablecoin USDT fully complies with the EU crypto regulations.
Since mid-December, some exchanges, including Coinbase Europe, have ceased offering USDT to their European Union customers.
Tether’s Market Cap Dropped
Since MiCA took effect, USDT’s market cap has dropped by $1.6 billion, now slightly above $137 billion. This marks the most significant decline since November 2022, when USDT’s market value fell 5.7% following the collapse of the FTX exchange.
Over the past two weeks, USDT’s market cap has decreased by 2.7%, from a record high of $141 billion on December 19 to its current level.
The drop in USDT also cost it the third spot in the crypto market rankings, which has now been reclaimed by the rising Ripple (XRP). XRP’s market cap surged to $138.98 billion on Friday as the token gained bullish momentum.
Last year, Ripple Labs announced plans to launch Ripple USD (RLUSD), a US dollar-backed stablecoin.
On the Flipside
- While Tether navigates regulatory uncertainty, it retains a dominant position in the global stablecoin market.
Discover DailyCoin’s popular crypto news:
XRP on the Rise: Technical Indicators Signal Possible Upswing
