What is Tether
What is Tether?
Tether is a fiat-backed stablecoin that enables secure and stable blockchain transactions. Each token is pegged 1:1 to a fiat currency or commodity, ensuring minimal price fluctuation. Available stablecoins include:
• USDT: US Dollar
• EURT: Euro
• CNHT: Chinese Yuan
• MXNT: Mexican Peso
• XAUT: Gold
Backed by reserves, Tether combines the reliability of traditional finance with the innovation of blockchain technology.
Founded in July 2014 by Brock Pierce, Craig Sellars, and Reeve Collins, Tether (USDT), originally known as "Realcoin," is a stablecoin that aims to keep a fixed 1:1 exchange ratio with the US Dollar (USD).
Tether was one of the first stablecoins created, built upon Mastercoin (Omni), a protocol layer for Bitcoin that introduced the stablecoin concept in 2012.
The first tokens were issued on Omni in October 2014, with the project rebranding to “Tether” in November 2014. Tether pioneered what is now known as a fiat-collateralized stablecoin model and is the most widely transacted stablecoin.
Founded
2014
Bitfinex Trades Tether
2015
Bitfinex became the first platform to enable trading of USDT.
Tether is Hacked
2017
Tether was hacked, in which the “Tether Treasury” wallet address was drained of ~$30.95 million in USDT tokens. While these funds were not recovered, the project team marked these stolen tokens as “unredeemable.”
Bitfinex, ...alleged $850.00 million loss
2018
Bitfinex, facing an alleged $850.00 million loss due to Crypto Capital's actions, secured a line of credit from Tether. This loan was scrutinized by the New York State Attorney General (NYAG) since Tether's reserves, believed to fully back USDT, were used.
In April 2019, the NYAG revealed conflicting transactions between Bitfinex and Tether in an alleged attempt to cover the loss.
By 2021, Bitfinex claimed that it had repaid the loan; however, the NYAG found that Bitfinex and Tether made additional false statements to conceal the losses, ultimately leading to financial arrangements between the two to cover the losses.
Tether and Bitfinex settled with the NYAG in February 2021, agreeing to pay an $18.50 million fine, ceasing trading activity with residents of New York (United States), and implementing “a number of steps to increase transparency.” Of note, a Tether blog post states, “Under the terms of the settlement, we admit no wrongdoing.”
Tether Gets Charged
2021
In October 2021, the United States Commodity Futures Trading Commission (CFTC) issued an order filing and settling charges against Tether Holdings Limited, Tether Limited, Tether Operations Limited, and Tether International Limited “for making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin.
The order requires Tether to pay a civil monetary penalty of $41.00 million and cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.” Additional case background information can be seen here.
Paolo Ardonio
2023
In October 2023, long-time CTO Paolo Ardoino was appointed as CEO of Tether, succeeding Jean-Louis van der Velde. According to the announcement, Ardoino’s CEO duties would begin in December 2023.
Milestones
2024
In 2024, Tether (USDT) achieved significant milestones, reinforcing its position in the cryptocurrency market:
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Financial Performance: Tether reported a record-breaking profit of $5.2 billion in the first half of 2024, with a net operating profit of $1.3 billion in the second quarter alone. The company’s U.S. Treasury holdings reached approximately $97.6 billion, underscoring its financial robustness.
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Market Adoption: The number of wallets holding USDT surpassed 109 million in the fourth quarter, indicating widespread adoption and solidifying its dominance in the stablecoin market.
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Regulatory Developments: The Abu Dhabi Global Market’s Financial Services Regulatory Authority recognized USDT as an Accepted Virtual Asset, allowing licensed entities to integrate it into their services, thereby expanding Tether’s presence in regulated financial ecosystems.
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Product Expansion: Tether introduced MiCA-compliant EURQ and USDQ tokens and unveiled Hadron, a platform for asset tokenization across financial markets, demonstrating its commitment to innovation and compliance.
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Investments: The company diversified its portfolio by investing in sectors such as payments, telecommunications, artificial intelligence, and Bitcoin mining, aiming to build beyond USDT and enhance its ecosystem.
These developments highlight Tether’s growth and its efforts to integrate more deeply into the global financial system.
