Renowned trader cautions that Tether is on a path towards catastrophe prior to US dollar
Accusations of corruption have been directed towards Tether (USDT), raising concerns about its future and whether it could follow in the footsteps of FTX. Peter Brandt, a veteran trader and markets expert, shares these concerns and believes that the popular stablecoin may be heading towards a catastrophe. Brandt’s views align with those of non-profit organization Consumers’ Research, which has launched a campaign against Tether, accusing it of posing a threat to consumers. Brandt expressed his opinions in a recent post on X.
Brandt has long argued that Tether is heading for disaster, and he believes that the demise of the United States dollar (USD) will come years after Tether’s downfall. Consumers’ Research has been identified as the organization behind a digital billboard in New York City’s Times Square that reads “Tether to corruption.” The organization’s CEO, Wild Hild, stated in a press release that Tether’s affiliations with FTX before its crash are concerning.
According to Hild, Tether has engaged in suspicious business practices, such as refusing to perform an audit for a decade and being used by terrorists and drug and human traffickers. Given these warning signs, Consumers’ Research fears that Tether could become the next FTX. The organization advises consumers to be cautious of stablecoins that do not provide proper certification of their assets.
In its X post, Consumers’ Research argues that while the future may involve stablecoins, Tether should not be included. The organization claims that Tether has misled the market about its U.S. backing, received a high-risk rating from S&P, and refused to undergo a rigorous independent financial audit.
Despite these allegations and the campaign by Consumers’ Research, Tether remains pegged to the US dollar. However, history has shown that stablecoins tend to depeg when their parent companies face controversies. This occurred with the LUNA/UST algorithmic stablecoin, causing a sustained bearish season in the cryptocurrency market. It also happened with Circle’s USD Coin (USDC) in March 2023 due to its exposure to the failing Silicon Valley Bank (SVB).
It is uncertain how long Tether will remain pegged to the US dollar, and only time will reveal the outcome. It is important to note that the content on this site should not be considered investment advice, as investing always carries risks.