Ripple CEO Brad Garlinghouse clarified that his recent comments on the World Class podcast were not an attack on USDT, contrary to how Paolo Ardoino, the head of the stablecoin issuer, portrayed them.
I wasn’t attacking Tether…the next words out of my mouth during the podcast were that I view Tether as a hugely important part of the ecosystem. My point was that the US govt has clearly indicated they want more control over USD-backed stablecoin issuers, and thus, Tether, as…
— Brad Garlinghouse (@bgarlinghouse) May 13, 2024
Garlinghouse had noted that it seemed evident to him that US authorities intended to pursue Tether.
In response, the company’s CEO Ardoino published a lengthy post, beginning with the assertion:
“An uninformed CEO, leading a company under investigation by the SEC, launching a competing stablecoin (cui prodest) is sowing fear about USDT.”
He went on to detail Tether’s cooperation with law enforcement and regulators in various countries, the firm’s efforts to comply with regulatory rules, and the sanctions regime.
Ardoino’s accusations against Garlinghouse were supported by well-known Bitcoin advocate and CEO of JAN3, Samson Mow.
So Ripple, who paid Greenpeace $5 million to FUD #Bitcoin, is now actively spreading FUD about Tether to try to get traction on their own stablecoin. Not a surprise at all. https://t.co/yTP91GOKLk
— Samson Mow (@Excellion) May 13, 2024
“So Ripple, which paid $5 million to Greenpeace for FUD against Bitcoin, is now actively spreading negativity about Tether to draw attention to its own stablecoin. Not surprising,” he wrote.
Ripple CEO Clarifies Misunderstanding
In his response to Ardoino, Garlinghouse emphasized that he referred to “Tether as a crucial part of the cryptocurrency ecosystem.”
“I meant to say that the US government has clearly indicated it wants more control over USD-backed stablecoin issuers and, thus, Tether, as the largest player, is in their sights,” he added.
Some commentators were less conciliatory, recalling real concerns about Tether’s transparency.
Let me give you an update on #Tether USDT ecosystem safety:
— #Tether has never been audited;
— $42.5 million fine by CTFC for lying about USD reserves;
— CEO doesn’t do public interviews;
— Less than 30% of their USDT backed by real dollars.
— #Tether is not only an indirect… pic.twitter.com/icJTbyaUkb— EDO FARINA ? XRP (@edward_farina) May 13, 2024
CEO of Alpha Lions Academy Eduardo Farina noted that the USDT issuer:
- has never been audited;
- paid a $42.5 million fine to the CTFC for lying about reserve sizes;
- the CEO does not give public interviews;
- less than 30% of the company’s stablecoin is backed by real money.
“Tether is not only a hidden financial pyramid but also an operation for issuing counterfeit dollars. …Do not be mistaken in thinking this is a coincidence: their logo is an atomic bomb,” he concluded.
Farina also suggested that Ardoino’s unexpected reaction to Garlinghouse’s remarks was driven by real concerns about competition from Ripple. He was not alone in this opinion.
Does Tether Always React Strongly to Company Mentions?
Earlier, Deutsche Bank Research analysts concluded that most stablecoins are doomed to lose their peg and disappear. The report mentioned USDT as the largest coin in the segment.
Tether stated that the document “lacks clarity and substantial evidence,” relying on “vague assertions rather than rigorous analysis.” Ardoino posted this argument from the statement on X:
“The history of fines and sanctions against Deutsche Bank raises doubts about its ability to criticize other industry players. The International Monetary Fund called the institution the most risky bank in the world.”
In January, Tether expressed disappointment with the UN’s assessment of USDT’s use in illegal activities and the neglect of the asset’s role in developing economies in response to a report published by the organization.
Analysts at JPMorgan highlighted the risks of USDT’s dominance for the stablecoin segment and the cryptocurrency ecosystem as a whole.
Bank specialists also believe that as a result of the implementation of stablecoin regulation in the US, Tether’s market share in the country will decrease in favor of competitors.