Crypto’s ‘too big to fail’ token Tether faces new threat from US
Tether Holdings Ltd.
Tether is the issuer of a namesake token known as USDT, designed to be a digital substitute for the US dollar, with a market capitalization of about $12O billion. It ranks as the third-biggest cryptocurrency by value, and is the most-traded token on a daily basis due to its role as a stand-in for the dollar in markets where traders aren’t able to use traditional currencies for transactions.
“For the crypto industry and crypto writ large, I do think Tether is too big to fail,” Hilary Allen, a law professor at American University who studies digital assets, said in an interview on Thursday, a day before the Wall Street Journal reported on US probes of the token that also raised the possibility of sanctions from the US Treasury. “If Tether were to go to zero tomorrow,” Allen added, ”it would be disastrous for the crypto economy.”
Tether CEO Paolo Ardoino immediately went on the defensive following the Journal report, posting on X that “as we told the WSJ, there is no indication that Tether is under investigation. WSJ is regurgitating old news. Full Stop.”
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