A profile of stablecoin developer Tether, which has withstood huge redemption runs during the current brutal crypto winter, competition, and regulatory pressure
Amid crypto's existential crisis, its largest liquidity provider, Tether, has withstood multiple multibillion-dollar redemption runs. Tweets: @mdudas , @silvermanjacob , and @sarahnemerson Tweets: Mike Dudas / @mdudas : it was fun while it lasted 🫡 https://www.forbes.com/... Jacob Silverman / @silvermanjacob : “According to Ardoino, van der Velde traveled to Europol on multiple occasions since the onset of the pandemic to explain how Tether operates.” https://www.forbes.com/... Sarah Emerson / @sarahnemerson : Great unraveling of Tether, the notorious stablecoin “run by a cabal of shadowy characters,” by @ninabambysheva and @Steven_Ehrlich, which also includes this amazing wife guy revelation https://www.forbes.com/... https://twitter.com/...
Context & Ripple Effects
The Forbes profile lands at the end of a year that stress-tested Tether repeatedly. In May it briefly lost its dollar peg, triggering more than $8.5B in redemptions while Circle's USDC gained $3.4B and Binance USD added $1.2B — yet Tether absorbed the run and kept its position as crypto's largest liquidity provider.
The scrutiny has been building for two years: an SDNY probe dating to early 2021, Bloomberg investigations into its reserves and structure after it issued 48B coins that year, and most recently reports of $6.1B in loans denominated and payable in its own stablecoin as of September 30. The new reporting adds van der Velde's repeated trips to Europol to explain how Tether operates.
First-order effects
- Tether has now demonstrated it can survive multibillion-dollar redemption runs without collapsing, which directly protects the exchanges and traders who rely on it as the market's dominant settlement asset.
- Competing issuers Circle (USDC) and Binance (BUSD) captured billions in circulation during the May run, but the profile suggests Tether retained its lead once pressure eased.
Second-order effects
- Rival stablecoins' gains during each run are temporary unless trust breaks permanently, so competitors must differentiate on transparency and reserve quality rather than waiting for Tether to fail.
- Tether's growing book of self-denominated loans means a future crisis would hit twice — redemptions drain reserves while borrowers repay in a token whose value depends on those same reserves, raising the stakes for every exchange holding it.
Third-order effects
- If Tether keeps surviving runs that would have killed it in earlier cycles, the industry may settle around one too-big-to-fail liquidity provider even as regulators — from SDNY to Europol — push for visibility into reserves and operations.
- Sustained regulatory engagement, including direct explanations to Europol, points toward stablecoins being treated as systemically important money-market-like infrastructure rather than a crypto-native curiosity.
The trend: Stablecoin markets are consolidating around a dominant issuer that survives repeated bank-run-style tests, forcing regulators to engage directly rather than wait for collapse.