Tether's transparency and business structure raise market concerns
Tether's transparency and business structure have raised concerns similar to the $118 billion FTX. As the world's largest stablecoin, Tether's market share has exceeded 75% of the entire stablecoin market. This phenomenon has attracted widespread attention, especially in the absence of third-party audits, and investors' concerns about its possible liquidity crisis have continued to grow.
In recent years, investor confidence in Tether has been challenged, especially considering its important position in the cryptocurrency industry. Cyber Capital founder Justin Bons made it clear that he was uneasy about Tether's potential risks and pointed out that the company failed to provide sufficient evidence to support the collateral it claimed to hold. In 2021, the U.S. Commodity and Futures Trading Commission (CFTC) fined Tether for misrepresenting its reserves, which further deepened public distrust.
In addition, unlike the FTX collapse, if Tether has problems, it is likely due to its complex structural connections with banks and underlying assets. This highly centralized business model makes Tether have a significant impact on the entire crypto market, which is exactly what many industry experts are wary of.
In a recent investment, Tether invested $100 million in Adecoagro to acquire a 9.8% stake in the Latin American agricultural giant. This move provides a deeper understanding of Tether’s governance structure, but also sparks a new round of discussions about transparency and management control. Although the company claims that its reserves are worth more than $118 billion, the lack of independent audits remains an important issue that needs to be addressed.
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