Tether Accused of Corruption and Audit Refusal in New Billboard Campaign

A new advertising campaign has been launched against Tether, the world’s largest stablecoin issuer, highlighting allegations of corruption and criminal activities. 

Fox Business journalist Eleanor Terrett reported that the campaign includes a digital billboard in Times Square, mobile billboards, a television ad, and a website, TetheredToCorruption.com.

🚨NEW: A digital billboard accusing the world’s largest stablecoin @Tether_to of corruption is being featured in Times Square, NYC right now. https://t.co/tH71Z0tLYS pic.twitter.com/QoBHXYrGOe

— Eleanor Terrett (@EleanorTerrett) June 18, 2024

Consumers’ Research, a conservative nonprofit organization, is spearheading the campaign. Will Hild, the Executive Director, has expressed serious concerns regarding Tether’s business practices. Hild points to Tether’s decade-long refusal to conduct independent audits, drawing parallels with the FTX scandal.

The campaign accuses Tether of being involved in various criminal activities, including drug trafficking, human trafficking, evading sanctions, and funding terrorist organizations such as Hamas. Hild asserts that Tether’s lack of transparency and accountability poses significant risks, likening the situation to FTX’s collapse in 2022.

Concerns Over Criminal Activity

Tether is allegedly the stablecoin of choice for criminals in 2023 due to its stable value, pegged one-to-one with the U.S. dollar. Hild claims that Tether is being used by bad actors, including Russia, to evade monetary sanctions and by human traffickers. He further alleges that countries like Venezuela also utilize Tether for illicit purposes.

These accusations are not new to Tether, but the scale of the current campaign, which includes prominent advertising efforts, is notable. The campaign aims to pressure Tether to adopt greater transparency and undergo independent audits to verify its financial backing.

Tether’s refusal to conduct an independent audit is a central issue in the campaign. Critics argue that without such verification, Tether’s claims of being fully backed by U.S. dollars remain unproven. This lack of transparency has led some to compare Tether to a Ponzi scheme, casting doubts on the stability and reliability of the stablecoin.

Hild emphasizes the similarities between Tether and FTX, noting that both operate outside the United States and face allegations of questionable financial practices. Tether’s refusal to submit to audits raises concerns about its stability and legitimacy, particularly in light of FTX’s collapse.

Recent Developments from Tether

Despite the accusations, Tether has introduced a new asset class called Alloy by Tether, secured by Tether Gold. This project aims to combine the reliability of gold with the stability of a pegged currency, providing enhanced stability in the digital economy. Alloy by Tether represents a new category of digital assets designed to reflect the value of underlying assets, utilizing stabilization methods such as over-collateralization with liquid assets and leveraging secondary market liquidity pools.

Tether has consistently refuted similar accusations in the past. However, at the time of this writing, Tether has not issued an official statement regarding the current campaign or the allegations brought forward by Consumers’ Research. The outcome of this campaign and its potential impact on Tether’s operations remains to be seen.