Founders like no other… – Tether (USDT) is one of stablecoins most popular on the cryptocurrency market with $68 billion outstanding. However, a survey revealed that only 4 people controlled Tether’s holdings in 2018, which raised concerns about its centralization and at the transparency of its activities.
Tether controlled by an inner circle in 2018
It is investigators from the New York Attorney General and the Commodity Futures Trading Commission who are dealing with Tether in 2021. The information gleaned was later reported by the Wall Street Journal: 4 people controlled 86% of stablecoin issuer in 2018.
In September 2014, Giancarlo Devasini (plastic surgeon) et Brock Pierce (crypto entrepreneur) create Tether and declare it in the British Virgin Islands. Pierce leaves the company in 2018, Devasini then owns 43% USDT. It will be noted for the rest of our case that Devasini is also the CFO of Bitfinex. There relationship with the crypto platform is regularly criticized for Tether.
And precisely, the Bitfinex CEO, Jean-Louis Van Der Veldeand Chief Counsel Stuart Hoegner each held about 15% USDT in 2018, according to documents. Finally, the fourth in Tether 2018 is Christopher Harborne in the UK (also known as Chakrit Sakunkrit in Thailand) who owned some 13%.
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Tether does not let it go
These revelations have raised centralization concerns of Tether, the transparency of its activities, but also its weaknesses. Documents obtained by the WSJ showed that Tether had difficulties in guaranteeing the value of its stable currency, which has resulted in an uncertain situation for users and investors.
Indeed, even though Tether claims to be tied to the value of the US dollarthe centralization of its assets in the hands of so few people calls into question the stablecoin stability. Moreover, this centralization can also make Tether vulnerable to market manipulation and corruption.
For its part, Tether does not let it go. After the publication of the Wall Street Journal revelations, Paolo Ardoino took to Twitter to defend himself:
” The more clown items, the bigger the attachment. People understand that Tether stands for freedom and inclusion. (…) »
This old case resurfaces over the years and comes out at a time when wallets are damaged by a crypto winter and a crisis of confidence unprecedented in the history of cryptocurrency. Rumors around Tether are not new. Already in the US regulation collimatora multi-million dollar settlement between the two parties was reached in 2021.
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