Tether (USDT-USD) is at the center of the crypto world once again, this time with a $5 billion minting spree that injected massive liquidity into the market in just 72 hours. This surge, while drawing the attention of crypto enthusiasts, is also raising red flags in financial circles. As the market leader among stablecoins, Tether’s role in driving Bitcoin’s price surge to new highs has everyone wondering about the impact of its growing dominance, especially given the ongoing scrutiny around its financial practices.
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Tether’s Market Influence Expands
The minting spree began on Nov. 6, when Tether released $1 billion into circulation. This coincided with Bitcoin’s climb to $76,200, and Tether followed up with two more $2 billion issuances in early November. By the time the minting ended, Tether’s market cap surged to $124 billion, solidifying its position as the dominant stablecoin in the crypto ecosystem. According to Cointelegraph, this surge aligns with broader market optimism, with Tether helping fuel Bitcoin’s climb to near $100,000.
Lutnick’s Controversial Tether Connection
Behind the scenes, Howard Lutnick, CEO of Cantor Fitzgerald and a key ally to former U.S. President Donald Trump, is becoming increasingly involved with Tether. Lutnick has been vocal in defending Tether’s financial stability, but his lack of transparency about the company’s reserves has raised concerns. He has failed to provide clear proof of Tether’s backing, and as Cointelegraph notes, his deepening ties to Tether and his stake in the company are raising eyebrows among regulators and financial experts.
Calls for Greater Transparency
While some see Lutnick’s involvement as a strategic move to lend credibility to Tether’s operations, others are pushing for more transparency. Industry experts like Abdul Rafay Gadit argue that “enhanced transparency on the part of the issuer is essential for compliance with regulatory requirements.”
Meanwhile, Tether’s ongoing legal battles, including a $41 million penalty by the CFTC and settlements over reserve misrepresentations, show the growing pressure the company faces in ensuring its legitimacy. Cointelegraph reports that Tether must address these concerns if it is to maintain trust among both institutional investors and the broader crypto community.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
