Tether CEO Accuses Ripple Chief of Spreading Panic Over USDT

Tether CEO Paolo Ardoino has lashed back at Ripple after its CEO announced that the US government is after USDT. Ardoino, in his tweet, did not mention Ripple or its CEO, Brad Garlinghouse, but appeared to be replying to Garlinghouse's recent remarks that 'the Tether FUD is too much and must stop as the well-coordinated negativity by Ripple/XRP is getting out of hand'.

Notably, though, Ripple is launching its own USD-pegged stablecoin in June. "An uninformed CEO, leading a company under SEC investigation, launching a competitive stablecoin, is spreading fear about USDT," he declared. Ripple has not responded to our requests for comment at press time.

Tether issues hang on transparency and sanctions. Garlinghouse has been commenting on the use of Tether by groups of interest, including terrorist organizations, and sanctioned countries like Russia, to bypass US economic restrictions.

Policymakers are concerned with the existence of offshore-issued stablecoins like Tether, which ostensibly facilitates illicit financial activities. Stablecoins, being pegged to fiat currencies, have gained in popularity in furthering the usage of crypto but have come under scrutiny in terms of their transparency and regulation.

In its defense, Ardoino listed the global usage of USDt, the continuity of price and liquidity reserves, the reputation of custodianship, and compliance measures in place. He further gave statistics to show Tether's compliance with law enforcement and regulation, including compliance with OFAC/SDN lists.

Most of that activity was on scam, hacks, and money laundering-related alerts, although he also noted that a smaller amount was indicative of potential terrorist financing. Tether has faced criticism for a lack of transparency about the assets backing USDT, but the company has since addressed this by publishing third-party independent quarterly audits.

This was after the CFTC, in October 2021, fined Tether $41m for lying to customers about its reserves, knowing that Tether had enough fiat to fully back USDT for less than a third of the time between 2016 and 2019.