Former US Securities and Exchange Commission (SEC) lawyer John Reed Stark has raised serious allegations against Tether, a popular cryptocurrency, calling it a “counterfeiter”.
John Reed Stark, former lawyer for the United States Securities and Exchange Commission (SEC), has raised serious concerns about the popular cryptocurrency Tether, accusing it of being a “counterfeiter”.
In a series of tweets, Stark criticized Paolo Ardoino, the CTO of Bitfinex, the company behind Tether, for failing to provide transparent operations and suggesting that using Tether is risky due to a lack of oversight and regulatory measures such as audits, inspections and insurance. .
Stark went further, stating that Tether’s practice of using attestation reports as proof of their financial stability is misleading and unethical. “In my experience, attestations are not standard nomenclature, not legitimate, and ‘aren’t even a thing.’ ethical and misleading,” he tweeted. Ardoino has previously cited these attestations as proof of Tether’s creditworthiness.
Stark also disputed Tether’s claim that it is equivalent to the US dollar, going so far as to call it a “counterfeiter”. He points out that Tether, often referred to as USDT, tries to mimic the US dollar but lacks the characteristics of the currency. “Tether masquerades as US dollars, even going so far as to try to look like US dollars by labeling itself USDT – all in plain sight. Yet Tether is not the US dollar and does not have a only feature in that sense, Tether, IMHO, is a counterfeiter…” Stark said.
Ardoino has yet to respond to Stark’s latest allegations. In the past, Tether had faced criticism for a lack of transparency in its operations.
The claims also highlight the crypto industry’s broader concerns about the regulation, oversight, and true value of digital currencies.
As reported by U.Today, the leading stablecoin issuer reported a net profit of $1.5 billion in the first quarter of 2023 amid growing token circulation and reserve diversification.