Tether (USDT) Depeg FUD May Just be Starting, Here’s Why

The digital currency ecosystem was riled today following the depegging of the industry’s largest stablecoin, Tether (USDT). The depegging, which has seen the stablecoin plunge to $0.9991 at the time of writing, was attributed to the loan saga on the DeFi platform Curve. New details are, however, emerging with Tether Holdings Ltd issuing a statement detailing new revelations about the entire ordeal.

Tether’s Major Concern

As the firm noted, the Office of the New York Attorney General (NYAG) provided materials relating to the first of its quarterly reports to Coindesk who had requested them shortly after Tether and NYAG reached their settlement agreement in 2021.

According to Tether, the documents were released because it dropped its opposition to Coindesk. The stablecoin issuer said it initiated the opposition proceedings in the first place “to prevent the use of sensitive commercial information that could potentially be exploited by malicious actors.”

Tether revealed that some of the documents shared with Coindesk include the statements from Tether’s banks showing the full existence of the company’s reserves, how the firm has been approaching its asset management obligations and short-term investments and diversification.

In what appears as a proactive move, Tether said there has been a lot of detraction with respect to the content of the documents and it wishes to state that the financial transactions do not reflect the current realities of the firm. The stablecoin issuer is calling on Coindesk not to reveal any past or current information about its customers despite not counting on the news outlet to adhere to fair coverage.

Recalling Alameda Research Saga

Coindesk has played a very crucial role in the crypto ecosystem as it relates to the uncovering of the most hidden financial details on major companies in the industry. 

Back in November last year, the news outlet reported on the financial and transactional impropriety of Alameda Research, the trading firm founded by FTX co-founder, Sam Bankman-Fried. The revelations at the time led to the collapse of FTX and a similar fear appears to be brewing in the industry as it concerns Tether.

Though Tether has been controversial as it faces FUD all around, the firm has survived most of its attacks. The question now remains whether or not it will survive the details that the released documents may uncover. Should the details be controversial, the FUD may just be starting.