It is ‘clear’ that the US government is going after Tether – the CEO of Ripple

Ripple CEO Brad Garlinghouse is clear that the US government is “going away” from the stablecoin issuer Tether – which could have an unknown impact on crypto markets.

Garlinghouse said on the May 10 World Class podcast that there will be “100%” another crypto-related black swan event like failure and fraud perpetrated by FTX executives.

“The U.S. government is going after Tether, that's clear to me,” he said, without elaborating or suggesting that any U.S. action against Tether would be the next black swan. Instead, he called it “fun to watch.”

“I see Tether as a very important part of the ecosystem,” said Ripple's boss. He added that he doesn't know how to predict what kind of impact US regulatory action on Tether will have on the crypto ecosystem.

Garlinghouse's comments come as Ripple plans to launch its own stablecoin in 2024.

Tether Holdings is the parent company of the Tether (USDT) stablecoin, the largest by market capitalization, with subsidiaries of the same name responsible for issuing and managing various operations.

In the year In an October 2023 letter, US Senator Cynthia Lammis and Representative French Hill urged the Justice Department to “carefully review the extent to which Binance and Teter are providing material support and resources to support terrorism.”

In response to the letter, Teter said he was “always supportive of law enforcement” and was “absolutely committed” to working with authorities internationally.

Bloomberg reported in November 2022 that New York-based U.S. Attorney Damian Williams took over an earlier Justice Department investigation into hiding crypto-related funds from banks that Tether used to withdraw cash.

RELATED: Deutsche Bank blames Tether stablecoin for collapse

The company has been criticized for lack of transparency regarding the reserves backing the USDT and in recent years for publishing quarterly third-party audits.

In the year In October 2021, the regulator paid a $41 million fine to the Commodity Futures Trading Commission after the regulator said Tether “misrepresented” its reserves to its customers and found there were enough fiat reserves to back USDT by “only 27.6%” in the June period. From February 1, 2016 to February 25, 2019.

Ripple plans to launch a US dollar stablecoin in 2024, Ripple's chief technology officer David Schwartz told Cointelegraph in April, which will back the token in dollar deposits, short-term government Treasuries and “other cash equivalents.”

Magazine: Unstable Coins: Devaluation, Bankruptcy and Other Risks Ahead.