Amid accusations of corruption against the issuer of Tether (USDT) and raising questions about it being the next FTX, veteran trader and renowned markets expert Peter Brandt has shared his opinion that the popular stablecoin might be heading toward a catastrophe.
Specifically, Brandt’s concerns align with those of the non-profit organization Consumers’ Research, which has launched a campaign against the USDT issuer, accusing it of posing a threat to consumers, and he has shared his own views on the matter in an X post published on June 19.
Indeed, the legendary trader explained that he has been arguing “for years” that Tether was heading “eventually for disaster,” adding that the United States dollar (USD) “will eventually meet its demise” as well, but years after Tether experiences the same, as per his recent post.
What are the accusations about?
As it happens, the non-profit has stepped forward as the one behind a digital billboard on New York City’s Times Square with the tag “Tether to corruption,” with Consumers’ Research CEO Wild Hild citing in a subsequent press release some of the reports claiming Tether’s affiliations with FTX before its crash.
According to Hild:
“We are shining a light on Tether for their suspicious business practices, including a decade-long refusal to perform an audit and the routine use of the product by terrorists and traffickers of drugs and humans. Given these warning signs, we fear that Tether may very well be the next FTX. Consumers should be wary of any so-called stablecoin that refuses to properly certify that they actually hold the assets they claim.”
More recently, in the X post cited by Brandt, the non-profit has argued that the “future may be stablecoin, but it shouldn’t include Tether,” claiming that it has “misled the market about its U.S. backing, received a 4/5 high-risk rating from S&P, (…) and refused to submit to a rigorous independent financial audit.”
Will Tether depeg?
Meanwhile, Tether remains pegged to the US fiat currency despite these allegations and the multi-million dollar campaign launched by Consumers’ Research, but only time will tell for how long, as historically, stablecoins have had the tendency to depeg when their parent companies face controversies.
For instance, this happened to the LUNA/UST algorithmic stablecoin, pushing the cryptocurrency market into a sustained bearish season, as well as to Circle’s USD Coin (USDC) in March 2023 due to its $3.3 billion exposure to the failing Silicon Valley Bank (SVB).
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