Following the first half of 2022’s crypto winter and the demise of the Terra ecosystem, stablecoins like Tether caused a paradigm shift for many investors. Unfortunately, a large number of these coins have fallen short of delivering the stability they promised. As a result, users began to call for greater transparency in the reserves of the majority of stablecoins.
Tether Investors urged that the reserves be made public for a number of coins, including USDT. According to a report, Tether, the company that issues the USDT stablecoin, has been functioning opaquely.
It became clear that the business had been lending customers its token rather than selling it for money. Additionally, it has declined to reveal all of the loans it made in exchange for stablecoin. As a result of the claims and the issuer’s failure to be more transparent, concerns regarding the stability of Tether USDT are growing.
As Tether and its reserves publication have come under increasing pressure. With the demise of the FTX cryptocurrency exchange and its subsequent Chapter 11 bankruptcy, the situation for Tether grew worse.
Reeve Collins, Tether’s co-founder, made the decision to intervene as the backlash against the company grew. On the most recent SquawkBox broadcast of CNBC, he has finally defended the company against a number of accusations.
Tether released its evidence of reserves on the company website, according to the co-founder. He claims that everyone may view or verify the information revealed in the publication.
Collins added that the company is audited frequently over a period of a few months. Government officials will be able to investigate the procedures used in managing and investing their assets thanks to this practice.
The co-founder added that during Tether’s operational history, its integrity had been upheld. He stated, for instance, that the company has always redeemed its coins for exactly $1 each.
Collins said that the business has not strayed from its operating principles even after he sold Tether in 2015. According to him, the company has endured the test of time because it has continued to use the best strategies for reducing operational risks.
Since Terra and other companies like 3AC and others went out of business, Tether has run into problems with authorities. The transparency of the stablecoin’s reserves has long been a source of controversy.
Again, concerns over USDT’s market cap have grown following the failure of the FTX exchange. The relationship between the FTX token, FTT, and the stablecoin is of concern. Due to the FTX saga’s widespread effects, USDT lost its peg to the dollar.