Tether Transparency Problems Are Coming Under Heavy Criticism

Key Points:

• Consumers’ Research has issued a report criticizing Tether transparency problems.
• The group has launched a digital ad campaign and sent an open letter to U.S. governors highlighting the risks associated with Tether’s operational practices.

On September 12, Consumers’ Research, a powerful U.S. consumer protection group in America of major cryptocurrency stablecoin Tether.

Read more: Tether Attestation Report Shows Record Net Profit of $5.2 Billion for the First Half of 2024

Consumers’ Research Slams Tether Transparency Problems

This report criticizes the group for a lack of transparency into its U.S. dollar reserves, claiming it has not provided a comprehensive audit from a top accounting firm.

Consumers’ Research launched a digital ad campaign along with the website TetherWarning.com to highlight what the organization describes as significant risks associated with Tether transparency problems.

According to the group, such a failure of the full audit of the stablecoin undermines financial accountability and hearkens back to a suite of concerns similar to those leading to the collapse of FTX and Alameda Research in 2022.

The report further states that Tether has failed in committing to offering detailed audits of its reserves, further making investors and regulators skeptical. This lack of transparency regarding verifiable information of what Tether really holds in reserve further adds to the growing unease in the cryptocurrency community.

To that end, Consumers’ Research has written an open letter to state governors nationwide, calling out what it perceives as the need for regulatory scrutiny.

Tether Ups Transparency in Light of Criticism

Tether’s response also includes recent efforts to boost transparency. That includes the hiring in July of Philip Gradwell, the former chief economist at Chainalysis, to produce reports about U.S. dollar tether usage. These are to be made available to US regulators and investors. Last month, the company said it had helped more than 145 law enforcement agencies recover $108.8 million worth of USDT tied to illicit activities.

Meanwhile, Tether also collaborated with Tron to support the “T3 Financial Crime Unit” in tracing and freezing illegal USDT transactions occurring on the Tron network, the major blockchain on which USDTs are traded. While all this has been going on, critics argue that Tether transparency problems still call into question its credibility in the cryptocurrency market.

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