tether

USDC investor shells out $2M to receive $0.05 USDT trying to evade crash

While the crypto market responded with a massive sell-off, not all USDC investors were lucky enough to walk away with their funds amid the uncertainty.

Soon after Circle revealed that Silicon Valley Bank did not transfer $3.3 billion of its USD Coin (USDC) reserves, the market responded with a massive sell-off — depegging the stablecoin from the U.S. dollar. However, not all investors were lucky enough to walk away with their funds amid the uncertainty.

To cut losses, investors started selling their USDC tokens in exchange for other stablecoins, such as Tether (USDT). Unfortunately, one transaction highlighted by Crypto Twitter member, BowTiedPickle, shows a USDC investor paid over $2 million to receive $0.05 of USDT.

On-chain investigations revealed that the user had stored the assets in a liquidity pool (LP) — a popular method to earn passive income in cryptocurrencies. The user could have sold his LP tokens for USDT for a 6% slippage. However, they chose to go for a “questionable ” method. As explained by BowTiedPickle:

“The unfortunate soul used the KyberSwap aggregation router to dump a large clip of 3CRV (DAI/USDC/USDT) LP token into USDT.”

Given the race against time, the USDC investor forgot to set his slippage, which allows investors to set an exact price of the token for the transaction to go through. He explained the nuances that eventually led to a maximal extractable value (MEV) bot netting $2.045 million in profit after paying $45 in gas and $39,000 in MEV bribes.

Crypto Twitter member BowTiedPickle provides an overview of how a USDC investor lost over $2 million. Source: Twitter

The above episode highlights how human error can result in a permanent loss of funds. While cashing out USDC for fiat or other cryptocurrencies, Cointelegraph advises investors to recheck the information and methods of transfer.

Related: Breaking: Circle discloses $3.3B tied up at Silicon Valley Bank

Soon after Circle confirmed that $3.3 billion was stuck with Silicon Valley Bank, a resultant sell-off of USDC caused the stablecoin’s value to drop below its $1 peg.

At the time of writing, USDC has lost over 10% of its value and trades at $0.8774.

​​Stablecoins and Ether are ‘going to be commodities,’ reaffirms CFTC chair

In the tug-of-war between the United States regulators over control of crypto assets, the Commodity Futures Trading Commission chair has tripled-down on his stance that Ether and stablecoins are commodities.

Stablecoins and Ether (ETH) are commodities that should come under the purview of the United States Commodity Futures Trading Commission, its chairman has again asserted at a recent Senate hearing.

At the March 8 Senate Agricultural hearing, CFTC chair Rostin Behnam was asked by Senator Kirsten Gillibrand about the differing views held by the regulator and the Securities and Exchange Commission following the CFTC’s 2021 settlement with stablecoin issuer Tether. Behnam replied:

“Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view.”

“It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity,” he added.

In the past, the CFTC has asserted that certain digital assets such as Ether, Bitcoin (BTC) and Tether (USDT) were commodities — such as in its lawsuit against FTX founder Sam Bankman-Fried in mid-December.

Asked what evidence the CFTC would put forward to win regulatory influence over Ether during the Senate hearing, Behnam said it “would not have allowed” Ether futures products to be listed on CFTC exchanges if it “did not feel strongly that it was a commodity asset,” adding:

“We have litigation risk, we have agency credibility risk if we do something like that without serious legal defenses to support our argument that [the] asset is a commodity.”

The comment has seemingly cemented Behnam’s sometimes wavering opinion on the classification of Ether. During an invite-only event at Princeton University in November last year he said Bitcoin was the only cryptocurrency that could be viewed as a commodity, leaving out Ether. Only a month before that, he suggested Ether could be viewed as a commodity too.

Related: CFTC continues to explore digital asset policy considerations in MRAC meeting

Behnam’s most recent comments oppose a view held by SEC chair, Gary Gensler, who claimed in a Feb. 23 New York Magazine interview that “everything other than Bitcoin” is a security, a claim that was rebuffed by multiple crypto lawyers.

The differing viewpoints of the market regulators could set the stage for a conflict as each vies for regulatory control of the crypto industry.

In mid-Febuary, the SEC flexed its authority against stablecoin issuer Paxos saying it may sue the firm for violating investor protection laws alleging its Binance USD (BUSD) stablecoin is an unregistered security.

Around the same time, the regulator similarly targeted Terraform Labs and called its algorithmic stablecoin TerraUSD Classic (USTC) a security, a move Delphi Labs general counsel, Gabriel Shapiro, said could be a “roadmap” for how the SEC could structure future suits against other stablecoin issuers.

The SEC’s crypto clampdowns have seen pushback from the industry. Circle founder and CEO Jeremy Allaire said he doesn’t believe “the SEC is the regulator for stablecoins,” saying they should be overseen by a banking regulator.

Key Bitcoin price metrics point to BTC downside below $22.5K

BTC’s $1,420 decline in the span of an hour negatively impacted demand for stablecoins in Asia and shifted futures traders into a more defensive attitude.

Bitcoin (BTC) faced a one-hour $1,420 pullback on March 3 following Silvergate Bank’s 57.7% stock crash, which was due to significant losses and “suboptimal capitalization.” The U.S. fintech-friendly bank was a key financial infrastructure provider for exchanges, institutional investors and mining companies, and some investors are worried that its potential demise could have wide-ranging negative impacts on the crypto sector.

The crypto-friendly bank discontinued its digital asset payment railway — Silvergate Exchange Network — citing excessive risks. Silvergate also reportedly borrowed $3.6 billion from the U.S. Federal Home Loan Banks System, a consortium of regional banks and lenders, to mitigate the effects of a surge in withdrawals.

Among the impacted exchanges was Dubai-based Bybit, which announced the suspension of U.S. dollar transfers after March 10. The move follows Binance’s international platform, which suspends U.S. dollar fiat withdrawals and deposits on Feb. 6.

Fiat on- and off-ramps have always been troublesome areas due to the lack of a clear regulatory environment, especially in the United States. Additional uncertainty came from The Wall Street Journal’s March 3 report on iFinex, the holding company behind Tether and Bitfinex. Leaked documents and emails revealed the group reportedly relied on fake sales invoices and hid behind third parties to open bank accounts.

Despite a Wall Street Journal report alleging that Tether is being investigated by the Department of Justice, USDT (USDT) is still the absolute leading stablecoin, with a $71.4 billion market capitalization. The issue has spread across the industry as Paxos, the issuer of the third-largest stablecoin, was ordered by the New York Department of Financial Services on Feb. 13 to stop issuing Binance USD (BUSD).

Let’s look at Bitcoin derivatives metrics to better understand how professional traders are positioned in the current market conditions.

Derivatives metrics show buyers’ shrinking appetite

Traders should refer to the USD Coin (USDC) premium to measure the demand for cryptocurrency in Asia. The index measures the difference between China-based peer-to-peer stablecoin trades and the U.S. dollar.

Excessive cryptocurrency buying demand can pressure the indicator above fair value at 104%. On the other hand, the stablecoin’s market offer is flooded during bearish markets, causing a 4% or higher discount.

USDC peer-to-peer vs. USD/CNY. Source: OKX

The USDC premium indicator in Asian markets has been slightly positive for the past three weeks, but it is nowhere near the substantial 4% premium from early January. In addition, the metric shows weakening demand for stablecoins in Asia, down from 2.5% in the previous week.

Still, the present 1.5% premium should be interpreted as positive considering the bearish newsflow regarding crypto-fiat payment railways.

Bitcoin’s quarterly futures are the preferred instruments of whales and arbitrage desks. These fixed-month contracts usually trade at a slight premium to spot markets, indicating that sellers are requesting more money to withhold settlement longer.

Consequently, futures contracts should trade at a 5%–10% annualized premium in healthy markets. This situation is known as “contango” and is not exclusive to crypto markets.

Bitcoin 3-month futures annualized premium. Source: Laevitas

The chart shows that traders abandoned any prospects of exiting the neutral-to-bearish area on March 3 as the basis indicator moved away from the 5% threshold. However, the current 3% premium is lower than last week’s 4.5%, reflecting fewer investors’ optimism.

On the bright side, the 6.2% drop in BTC price had a near uneventful impact on Bitcoin futures markets. Higher demand for bearish bets using leverage would have moved the basis indicator to the negative area, known as “backwardation.”

Additional volatility is expected on March 14

In the week following Feb. 27, Bitcoin’s price lost 4.5%, indicating that investors are effectively worried about contagion from Silvergate Bank. Even though crypto exchanges and stablecoin providers have denied exposure to the troubled fintech firm, the cut-off from its payment processing system has raised uncertainty.

Analysts are now focused on the announcement of the Consumer Price Index (CPI) inflation data on March 14. As Cointelegraph noted, CPI prints tend to spark short-term volatility across risk assets, although often short-lived in Bitcoin’s price movements.

Derivatives metrics currently point to limited pressure from the Silvergate Bank saga, but the odds favor Bitcoin bears, considering the diminishing demand for stablecoins in Asia and the BTC futures premium.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Tether strikes at WSJ over ‘stale allegations’ of faked documents for bank accounts

Tether has hit back at a Wall Street Journal report detailing alleged shady dealings by it and Bitfinex to open bank accounts.

The company behind stablecoin Tether (USDT) has rebuffed a report by The Wall Street Journal claiming it had ties to entities that faked documents and used shell companies to maintain access to the banking system.

On March 3, the WSJ reported on leaked documents and emails purportedly revealing that entities tied to Tether and its sister cryptocurrency exchange Bitfinex faked sales invoices and transactions and hid behind third parties in order to open bank accounts they otherwise may not have been able to open.

In a March 3 statement, Tether called the findings of the report “stale allegations from long ago” and “wholly inaccurate and misleading,” adding:

“Bitfinex and Tether have world-class compliance programs and adhere to applicable Anti-Money Laundering, Know Your Customer, and Counter-Terrorist Financing legal requirements.”

The firm went on to say that it was a “proud” partner with law enforcement and “routinely and voluntarily” assists authorities in the United States and abroad.

Tether and Bitfinex chief technology officer Paolo Ardoino tweeted on March 3 that the report had “misinformation and inaccuracies” and insinuated that the WSJ reporters were clowns.

Tether and Bitfinex told Cointelegraph that they have no further comments aside from the public letter.

WSJ report claims Tether and Bitfinex obscured itself

The WSJ article outlines — through its reported review of leaked emails and documents — Tether and Bitfinex’s apparent dealings to stay connected to banks and other financial institutions that, if cut off from, would be  “an existential threat” to their business, according to a lawsuit filed by the pair against Wells Fargo bank.

One of the leaked emails suggests the firm’s China-based intermediaries were attempting to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal.”

Screenshot of headline from Wall Street Journal. Source: Wall Street Journal

There were also accusations in the report that Tether and Bitfinex used various means to skirt controls that would have restricted them from financial institutions, and had links to a firm that allegedly laundered money for a United States-designated terrorist organization, among others. 

Meanwhile, a person familiar with the matter told the WSJ that Tether has been under investigation by the Department of Justice in a probe headed by the U.S. Attorney’s Office for the Southern District of New York. The nature of the investigation could not be determined.

Related: Silvergate closes exchange network, releases $9.9M to BlockFi

Tether has faced multiple allegations of wrongdoing over the past few months and recently had to downplay a separate WSJ report in early February that claimed four men controlled approximately 86% of the firm since 2018.

It similarly had to combat what it called “FUD” (fear, uncertainty, and doubt) from a WSJ report last December concerning its secured loans and subsequently pledged to stop lending funds from its reserves.

Binance USD market cap falls below $10B amid rising regulatory concerns

BUSD’s market cap is down by nearly $14 billion from its all-time high of $23.49 billion, set on Nov. 15, 2022.

Binance USD’s (BUSD) market cap has fallen below $10 billion for the first time in almost two years amid a United States regulatory crackdown on its token issuer and a planned delisting from a major crypto exchange.

BUSD’s market cap has been on a steep downward trajectory since its all-time high market cap of $23.49 billion, which it hit on Nov. 15, just a few days after the shock collapse of FTX.

As of March 3, the stablecoin’s market cap has fallen to $9.66 billion — levels not seen since June 29, 2021.

Market cap of Binance USD (BUSD) over the last 12 months. Source: CoinGecko.

Most recently, BUSD has been the subject of a potential lawsuit against Paxos by the United States Securities Exchange Commission on Feb. 12 over a possible violation of investor protection laws. Since then, $6.65 billion has been shaved off BUSD’s market cap.

Paxos was also ordered by the New York District of Financial Services to stop minting and issuing BUSD on Feb. 12 as well, which has likely contributed to the stablecoin’s market cap fall.

Earlier this week, cryptocurrency exchange Coinbase announced that it would be delisting BUSD from its exchange on March 13 because the stablecoin “no longer met our listing standards,” a Coinbase spokesman told Cointelegraph.

The wider crypto market has also seen a fall in market cap, with many pointing to the recent controversy surrounding Silvergate Bank with the late filing of its annual 10-K financial report on March 1.

Related: Unstablecoins: Depegging, bank runs and other risks loom

Upon its launch in September 2019, the Binance-branded stablecoin quickly surged to become the third-largest stablecoin, behind Tether (USDT) and USD Coin (USDC).

The stablecoin is currently in 10th position in terms of market cap across all cryptocurrencies. The next crypto token on the list is Solana (SOL), with $7.98 billion in market cap.

The largest stablecoins by market cap. Source: CoinMarketCap

Interestingly, Binance CEO Changpeng “CZ” Zhao stated in a Feb. 14 Twitter Spaces event that he never thought very highly of the Binance stablecoin project, adding that he thought it “may fail” when it first rolled out.

To account for the fall in demand for BUSD, Binance recently minted nearly $50 million worth of TrueUSD (TUSD) as the cryptocurrency exchange looks to diversify its stablecoin holdings.

BIS-funded regulator to probe DeFi entry points like stablecoins

Despite providing many novel services, DeFi does not differ substantially from traditional finance in its functions, the Financial Stability Board stated.

The Financial Stability Board (FSB), the financial regulator funded by the Bank for International Settlements (BIS), is pushing international regulations for decentralized finance (DeFi).

On Feb. 16, the FSB issued a report on the financial stability risks of DeFi, highlighting major vulnerabilities, transmission channels and the evolution of DeFi.

Despite providing many “novel” services, DeFi “does not differ substantially” from traditional finance (TradFi) in its functions, the authority said in the report. By trying to replicate some functions of TradFi, DeFi increases potential vulnerabilities due to the use of novel technologies, the high degree of ecosystem interlinkages and the lack of regulation or compliance, the FSB argued.

Moreover, the authority claimed that the actual degree of decentralization in DeFi systems “often deviates substantially” from the stated claims of the founding originators.

To prevent the development of DeFi-associated financial stability risks, the FSB is cooperating with global standard-setting bodies to assess DeFi regulations across multiple jurisdictions.

Monthly DeFi unique addresses and number of DeFi apps. Source: FSB

In this regard, a key element to consider would be the entry points of DeFi users, including stablecoins and centralized crypto asset platforms, the FSB said, adding:

“The FSB may consider whether subjecting these crypto-asset types and entities to additional prudential and investor protection requirements, or stepping up the enforcement of existing requirements, could reduce the risks inherent in closer interconnections.”

The FSB emphasized that asset-backed stablecoins like Tether (USDT) and algorithmic stablecoins like Dai (DAI) play an important role within the DeFi ecosystem through their use in purchasing, settling, trading, lending and borrowing other crypto-assets. The regulator suggested that the rise of stablecoins would also likely increase the adoption of DeFi solutions by retail and corporate users, as well as facilitate the adoption of crypto assets as a means of payment.

“With respect to liquidity and maturity mismatch issues, stablecoins are a crucial area of focus,” the FSB wrote, stressing the need to understand the peculiarities of different stablecoins to monitor the risk they pose to the crypto industry, including DeFi ecosystems.

Related: Circle squashes rumors of planned SEC enforcement action

The news comes amid the increasing scrutiny of some major stablecoins by global regulators. On Feb. 13, blockchain infrastructure platform Paxos Trust announced that it would stop issuing Binance USD (BUSD) stablecoins amid an ongoing probe by New York regulators. The New York Department of Financial Services ordered Paxos Trust to stop BUSD issuance, alleging that BUSD is an unregistered security.

Tether market cap nears $70B as SEC crypto crackdown hurts stablecoin rivals

Tether’s USDT has seen its market capitalization rebound to nearly $70 billion as the SEC ordered Paxos to stop issuing BUSD, the third-largest stablecoin.

The United States Securities and Exchange Commission (SEC) plans to sue Paxos for issuing and listing its Binance USD (BUSD) stablecoin, benefitting its top-rival, Tether (USDT), whose market capitalization has risen to multimonth highs. 

BUSD market cap drops by $2 billion

The SEC claims that BUSD, a U.S. dollar-backed stablecoin, is a security, noting that Paxos has violated investor protection laws by white-labeling it.

Related: Paxos ‘categorically disagrees’ with the SEC that BUSD is a security

Since Feb. 13, when the news broke, the BUSD market cap has lost roughly $2 billion, down to around $14 billion as of Feb. 16 — the lowest since January 2022. 

BUSD circulating supply. Source: Messari

As Cointelegraph reported, Binance has seen its withdrawals and BUSD redemptions surge post-Paxos crackdown.

USD Coin market cap downtrend continues

At the same time, USD Coin (USDC), the second-largest stablecoin by market capitalization, has also witnessed capital outflows in reaction to the SEC crackdown news. Its supply decreased from $41.29 billion on Feb. 12 to as low as $40.99 billion on Feb. 14.

However, this figure rebounded to $41.30 billion on Feb. 15 after Circle clarified that it had not received any lawsuit threat from the SEC.

Despite recent inflows, USDC’s market cap remains in a general downtrend since its June 2022 peak of $56 billion — a 25% decline over the past eight months.

Tether dominance jumps, market cap rises over $69 billion

The regulatory crackdown on U.S.-based stablecoin firms has been a boon for top stablecoin Tether, whose market cap has jumped over $69 billion.

Data shows that nearly $890 million of inflows since Feb. 12 has pushed Tether’s market dominance to 51.25% as of Feb. 15.

USDT circulating market cap. Source: Messari

The jump likely suggests that investors were spooked by the crackdown on BUSD and sought safety in Tether USDT. Tether is owned by Hong Kong-based iFinex, which also owns the Bitfinex cryptocurrency exchange.

Related: USDT vs. USDC vs. BUSD: What are the similarities and differences?

Investigators have long attempted to uncover the accounting behind Tether to prove that its circulating USDT supply is not 100% backed by the dollar (and even a mix of other cryptocurrencies, treasury bills, money market funds and other assets) as it claims.

Tether has repeatedly denied the accusations and provides regular assurance opinions signed by third-party accounting companies every quarter.

Tether Reserves breakdown. Source: Tether.to

The latest report from Dec. 31, 2022, states that consolidated assets amounted to at least $67 billion, exceeding consolidated liabilities by at least $960 million.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Tether taps Cantor Fitzgerald to help oversee bond portfolio: Report

The USDT issuer has made inroads into the traditional finance and accounting sectors as it attempts to increase transparency around its holdings.

Stablecoin issuer Tether Holdings is relying on the services of a major Wall Street firm to manage its Treasury portfolio, according to a Feb. 10 report by The Wall Street Journal. 

Citing sources familiar with the matter, the Journal reported that financial services company Cantor Fitzgerald is helping Tether oversee a $39 billion bond portfolio comprised of United States Treasury securities. The report indicates that some firms on Wall Street are willing to support crypto service providers despite ongoing regulatory concerns facing the industry.

Founded in 1945, Cantor Fitzgerald specializes in investment banking services, including institutional equity and fixed-income sales. The company claims to employ over 12,000 people. Beyond helping to “manage” a portion of Tether’s portfolio, Cantor Fitzgerald’s specific involvement with the stablecoin issuer wasn’t spelled out in the Journal’s reporting.

Cointelegraph reached out to a spokesperson at Tether to inquire about its alleged partnership with Cantor Fitzgerald. The company issued the following statement:

“Tether has grown to be the most important player in the digital assets industry and is collaborating and regularly exploring new business opportunities with high-quality counterparties.”

Tether’s total assets as of Dec. 31 were $67 billion, exceeding its consolidated liabilities of $66 billion and giving the company excess reserves of at least $960 million. The company reported $700 million in net profits during the fourth quarter, based on an independent attestation from BDO.

While Tether has attempted to dispel rumors about its solvency and accounting standards, the company has been singled out repeatedly by major publications for not being transparent about the assets backing its USDT (USDT) reserves. In 2022, the criticisms shifted from whether Tether’s USDT is fully backed to the composition of the assets underpinning the stablecoin. By October, Tether had unwound its exposure to commercial paper in favor of Treasury bills in response to public scrutiny about its portfolio — namely, its alleged oversized exposure to Chinese commercial paper.

Related: 82% of Tether reserves held in ‘extremely liquid’ assets, according to attestation

Tether’s USDT remains the largest stablecoin by market capitalization at nearly $68.2 billion, according to CoinMarketCap.

Tether’s assets exceed liabilities in new reserves report by BDO

As of Dec. 31, 2022, Tether’s consolidated assets amounted to at least $67 billion, exceeding consolidated liabilities by at least $960 million.

Tether, the issuer of the world’s largest stablecoin by market value, has completed reserves attestation by major global accounting firm BDO.

The stablecoin firm released BDO’s assurance opinion on Feb. 9, which re-affirms the accuracy of Tether’s consolidated reserves report (CRR) as of Dec. 31, 2022.

The CRR shows that Tether’s consolidated assets amount to at least $67 billion, exceeding consolidated liabilities of $66 billion, with excess reserves equaling at least $960 million.

In addition to reducing its secured loans as committed, the report also shows Tether ended 2022 with zero commercial paper.

As previously reported, Tether completely removed commercial paper from (USDT) reserves by mid-October 2022, replacing those investments with United States Treasury Bills. The company originally announced the plan to get rid of commercial paper in USDT reserves in June 2022. At the time, commercial paper accounted for less than 25% of USDT’s total reserves of $82 billion.

Source: Tether

Paolo Ardoino, Tether and Bitfinex’s chief technology officer, took to Twitter on Thursday to point out that Tether demonstrated an “impressive resilience” to market black swan events that hit a number of crypto companies amid the bear market of 2022. He wrote:

“Tether demonstrated a superior approach to risk management, that allowed to maintain its leadership, while consolidating profits. Tether reiterates its commitment to be a leader into building Bitcoin and stablecoin technologies, investing in fundamental projects and infrastructures.”

BDO noted that the auditor’s opinion is limited “solely to the CRR and the corresponding consolidated total assets and consolidated total liabilities” as of Dec. 31, 2022. “Activity prior to and after this time and date was not considered when testing the balances and information described above,” the firm added.

Related: Only 4 people controlled Tether Holdings as of 2018: Report

Additionally, the auditing firm said it hasn’t performed any procedures or provided any assurance on the financial or non-financial activity on dates or times other than that noted in the report.

Only 4 people controlled Tether Holdings as of 2018: Report

New York Attorney General and Commodity Futures Trading Commission probes into Tether in 2021 exposed its previously unknown ownership structure.

Just four men controlled 86% of stablecoin issuer Tether Holdings Limited as of 2018, according to documents obtained by The Wall Street Journal in connection with United States authorities investigations.

Probes by the New York Attorney General’s office and the Commodity Futures Trading Commission into Tether Holdings in 2021 exposed its previously unknown ownership structure. The company is the issuer of Tether (USDT), the world’s largest stablecoin with $68 billion in circulation, according to CoinMarketCap.

According to the documents, Tether was built by the joint efforts of ex-plastic surgeon Giancarlo Devasini and former child actor and crypto entrepreneur Brock Pierce. In September 2014, Tether Holdings was incorporated in the British Virgin Islands.

Four years later, Pierce had left the company and Devasini owned about 43% of Tether. Devasini also helped to build the crypto exchange Bitfinex, where he is currently the chief financial officer. Bitfinex CEO Jean-Louis van Der Velde and chief counsel Stuart Hoegner each owned roughly 15% of Tether in 2018, according to documents.

The fourth-largest shareholder in Tether as of 2018 was a dual citizen known as Christopher Harborne in the United Kingdom and Chakrit Sakunkrit in Thailand, who owned 13%. 

Through their own holdings and another related company, the four men controlled approximately 86% of Tether, the report said.

Tether chief technology officer Paolo Ardoino tweeted that the Journal’s piece was a “clown article” that would boost the company’s growth:

According to a spokesperson for Tether, Ardoino’s posts were the company’s official response to the article. In November, another article claimed that Tether could be deemed “technically insolvent” if its assets fell 0.3%. The company labeled that article “false information.”

A settlement between Tether and the New York Attorney General’s office was reached in 2021 after the company allegedly misrepresented the amount of fiat collateral backing its stablecoin. In addition to paying $18.5 million in damages to the state of New York, the company was required to submit periodic disclosures of its reserves, Cointelegraph reported.