Tether has established itself as a key player in the global stablecoin market through strict financial transparency measures and active cooperation with law enforcement agencies. This article explores the key aspects of Tether’s operations that secure its dominant position.
Financial Transparency of Tether
In an official publication, Tether emphasizes transparency as a core principle of its operations. This is supported by independent reports from the global accounting firm BDO. In the second quarter of 2024, Tether reported holding reserves of $118.4 billion, exceeding its liabilities by $5.3 billion. This highlights Tether’s financial strength, with most of its reserves consisting of US Treasury bonds totaling over $97.6 billion. If the company were a country, it would rank 18th in the world in terms of Treasury holdings, surpassing countries like Germany and Australia. Transparency is not limited to periodic reports but also includes daily reports providing detailed reserve data, enabling Tether to offer users a level of confidence and assurance that surpasses many traditional financial institutions.
Cooperation with Law Enforcement
As the world’s largest stablecoin issuer, Tether actively supports law enforcement efforts in various countries. The company works with more than 180 agencies in 45 jurisdictions, utilizing tools to freeze about 1,850 wallets associated with criminal activities and recovering assets worth more than $113.8 million. Recent actions include freezing nearly $5 million linked to the Lazarus Group, a North Korean hacker group, demonstrating Tether’s ability to respond swiftly to global financial threats. In collaboration with the US Department of Justice, the company helped seize nearly $9 million from an international fraud organization, which was noted by US authorities as a significant step in protecting digital assets from fraud.
Stability in a Volatile Market
Tether plays a crucial role not only in law enforcement measures but also in maintaining market stability in unpredictable conditions. In May 2022, during a major cryptocurrency market crisis triggered by the Terra-LUNA depegging, Tether managed to redeem over $10 billion in a week and $20 billion in a month. This demonstrates the company’s readiness to back every issued token with high-quality and liquid reserves. Tether’s ability to handle large redemption requests far exceeds the capabilities of many of the world’s largest banks, highlighting its role in providing high liquidity to users.
Tether continues to play a pivotal role in the financial ecosystem, ensuring transparency, cooperating with law enforcement, and maintaining stability in a volatile market. These efforts contribute to growing trust among millions of users worldwide and bolster the dominance of the US dollar as a global reserve currency.
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