A former US States Securities and Exchange Commission (SEC) official criticised USDT issuer company Tether for its lack of information about reserved funds.
Tether is a popular stablecoin company, which operates USDT stablecoin in the crypto market. The USDT is ranking first in the whole crypto sector in the list of stablecoins competition. Indeed, USDT enjoys the first-mover advantage. Tether is a subsidiary of Bitfinex crypto exchange.
On 2 December CNBC Squawk Box covered a report about Tether company and its lack of full disclosure about its reserved funds.
John Reed, the former SEC official, quoted that report and slammed Tether company badly and claimed that Tether operating its business more likely as a ‘house of cards. And also said that Tether is running only a Ponzi scheme.
FTX failure & bad outcomes
FTX was a popular second-ranked crypto exchange but the mismanagement of the backend funds by the team resulted in a very bad situation for the company. On 8 November, FTX exchange was not able to give withdrawal of the funds to all the customers and finally on 12 November filed for bankruptcy under chapter 11 in a US district court.
The downfall of a top-ranked crypto company created a very big fear in the mind of every crypto investor and now the majority of the crypto investors are not ready to trust any company blindly.
Here Tether company is also big in terms of marketcap but the company never disclosed all of its details about the financial reserves.
Circle (USDC), a rival of Tether, is the second biggest stablecoin by market cap, always remains transparent to the crypto sector with its all reserved funds open to the USDT users and such types of transparency are helping to drive significant crypto investors toward USDC stablecoin as the best option to transfer & trade funds.
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Tether is running a Ponzi scheme, Says former SEC official