A deep dive on Tether, which issued 48B coins this year, as regulators struggle to understand its cash reserves, organizational structure, and other details
something money-market funds avoid.” By @ZekeFaux https://www.bloomberg.com/... Daniel Viola / @dannyviola : Great investigation into the likely Ponzi scheme that is Tether: https://www.bloomberg.com/... https://twitter.com/... Mark Little / @marklittlenews : “It was as if a playground snowball fight had escalated so wildly that the Joint Chiefs of Staff were being called in to avert a nuclear war.” This is a wild ride! https://www.bloomberg.com/... via @BW Marc Hochstein / @marchochstein : The big Bloomberg feature on tether is quite good but this line isn't quite fair. New L1 blockchains are in demand because ethereum is clogged and $SOL is supposedly faster. Does that justify +9,000% gains? Idk 🤷♂️ But it's *a* reason. https://www.bloomberg.com/... https://twitter.com/... Bloomberg Crypto / @crypto : NEW: If the trolls are right, and Tether is a Ponzi scheme, it would be larger than Bernie Madoff's. So we set out to solve the mystery. Read The Big Take via @BW ⬇️ https://www.bloomberg.com/... Michael Tobin / @tobin_tweets : New @ZekeFaux cover story just dropped and it's a masterclass on in-depth reporting. https://www.bloomberg.com/... https://twitter.com/... Stacy-Marie Ishmael / @s_m_i : “A wild search for the U.S. dollars supposedly backing the stablecoin at the center of the global cryptocurrency trade—and in the crosshairs of U.S. regulators and prosecutors.” - a deep dive into Tether by @ZekeFaux https://www.bloomberg.com/...
BloombergZeke Faux
Context & Ripple Effects
Tether's reserve claims were already under pressure after its reserve breakdown showed only a small cash component, while a separate report said the DOJ was examining alleged early bank-fraud conduct. The new investigation concentrates attention on the issuer's reserves and corporate structure as its token supply expands.
That scrutiny matters because Tether is widely used to buy cryptocurrencies on exchanges; uncertainty around the entity behind it therefore reaches beyond a single issuer.
First-order effects
U.S. regulators and prosecutors face greater pressure to establish what assets support Tether's outstanding coins and who controls the issuer.
Tether must contend with renewed public scrutiny of reserve quality and organizational transparency while rapidly expanding issuance.
Second-order effects
Crypto exchanges and traders that rely on Tether for crypto purchases gain a clearer incentive to assess their exposure to an issuer under regulatory scrutiny.
Competing stablecoin issuers can differentiate on reserve disclosures and governance as Tether's opacity becomes a focal point.
Third-order effects
Stablecoins are moving toward a legitimacy test in which reserve composition, governance, and regulatory access matter as much as token circulation.
If scrutiny produces stricter disclosure expectations, issuers that cannot clearly document backing and control structures will face a harder path to serving exchange liquidity.
The trend: The story is part of crypto's legitimacy gap: rapidly scaled financial tokens are drawing scrutiny over whether their backing and governance match their market role.
The chief executive officer listed on Tether's website, J.L. Van der Velde, is a Dutchman who lives in Hong Kong and seems never to have given an interview or spoken at a conference. @BW https://www.bloomberg.com/... The Lotos-eaters https://rich.co.ke/...
Tether Holdings started putting out a huge amount of digital coins There are now 69 billion Tethers in circulation, 48 billion of them issued this year. That means the company supposedly holds a corresponding $69 billion in real money to back the coins https://www.bloomberg.com/.…
This is from the amazing new piece on Tether and includes simply an incredible paragraph + image that sums up Where We Are At. https://www.bloomberg.com/... https://twitter.com/...
All the red flags. Tether seems to be like WeWork meets Theranos but at $69 billion scale with direct ties to cryptomarkets and Chinese real estate sector. Simply blown away. Fantastic article if you want to learn more about Tether. https://www.bloomberg.com/...
Business Week is effectively calling Tether as probably being both a Wildcat Bank and Liberty Reserve 2.0: https://www.bloomberg.com/... What I've been saying since 2018: https://www.lawfareblog.com/ ...
This story is bonkers. Inside the wild search for the billions of U.S. dollars supposedly backing Tether, the world's most popular stablecoin https://www.bloomberg.com/... via @BW
This fascinating story echoes concerns over El Salvador's Bitcoin experiment. What's backing all the bitcoin claims in the state Chivo Wallet? The 700 bitcoin @nayibbukele claims to have bought don't add up & the government refuses to say where the bitcoin is or what it's worth. …
'It's hard to believe that people had sent $69 billion in real U.S. dollars to a company that seemed to be practically quilted out of red flags. But every day traders buy and sell Tether coins as if they're just as good as dollars.' https://www.bloomberg.com/...
Tether is a microcosm of the entire crypto ecosystem. It's obviously a scam but a lot of people are making a lot of money pretending it isn't. The assumption being if it ever falls apart it will be someone else's problem. https://www.bloomberg.com/...
“Tether's lawyer, Stuart Hoegner, told me by phone that Van der Velde and Devasini prefer to avoid the limelight. He called Tether's critics “jihadists” set on the company's destruction.” https://www.bloomberg.com/...
Gripping story by @ZekeFaux on the bizarre world of Tether “If the trolls are right, and Tether is a Ponzi scheme, it would be larger than Bernie Madoff's” https://www.bloomberg.com/...
“After I returned to the U.S., I obtained a document showing a detailed account of Tether Holdings' reserves. It said they include billions of dollars of short-term loans to large Chinese companies—something money-market funds avoid.” By @ZekeFaux https://www.bloomberg.com/...
“It was as if a playground snowball fight had escalated so wildly that the Joint Chiefs of Staff were being called in to avert a nuclear war.” This is a wild ride! https://www.bloomberg.com/... via @BW
The big Bloomberg feature on tether is quite good but this line isn't quite fair. New L1 blockchains are in demand because ethereum is clogged and $SOL is supposedly faster. Does that justify +9,000% gains? Idk 🤷♂️ But it's *a* reason. https://www.bloomberg.com/... https://twitt…
NEW: If the trolls are right, and Tether is a Ponzi scheme, it would be larger than Bernie Madoff's. So we set out to solve the mystery. Read The Big Take via @BW ⬇️ https://www.bloomberg.com/...
“A wild search for the U.S. dollars supposedly backing the stablecoin at the center of the global cryptocurrency trade—and in the crosshairs of U.S. regulators and prosecutors.” - a deep dive into Tether by @ZekeFaux https://www.bloomberg.com/...