Tether, the issuer of the largest stablecoin USDT, has once again faced criticism for its lack of transparency.
Transparency Allegations
US consumer protection group Consumers' Research released a report criticizing Tether for its lack of transparency regarding its US dollar reserves. Analysts argue that Tether has published false transparency reports and has not conducted a full audit of the dollar reserves that allegedly back USDT.
Consumers' Research Report
Analysts noted that Tether has taken steps to increase transparency, but the company has never been audited by a major accounting firm. > "Tether has failed to deliver on its promise to provide full oversight of its dollar reserves. This lack of transparency contradicts expectations of financial accountability, particularly for a stablecoin that is claimed to be backed 1:1 by the US dollar," noted an analyst.
Market Risks and Consequences
Analysts argue that the lack of transparency at Tether is similar to the situation that led to the collapse of FTX and Alameda Research. They also accuse the company of "doing business with malicious actors" and failing to block illicit entities that use USDT to circumvent international sanctions.
The ongoing lack of transparency and absence of a full audit continue to raise concerns among investors and regulators, which could have significant implications for the stability of the stablecoin market.
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