The executive leadership of Tether is facing criminal charges against them. The possible criminal charges will intensify the pressure on a product on which the market is relying heavily.
However, experts have divided opinions on the matter as they believe that if Tether falls, the results will be surely chaotic but not catastrophic for the crypto market.
A report originated by Bloomberg claimed that an investigation by the U.S Justice Department is finalized on the matter. The authorities are now arguing about whether the criminal charges should be filed and hand the case over to the court against Tether.
Tether is the official provider of one of the most famous cryptocurrencies named stablecoins. Any verdict against the company’s executive could be killer for stablecoins.
Stablecoins are US dollar-backed crypto tokens and are currently the most popular cryptocurrency in the U.S. Despite the fact that many experts have picked stablecoins to replace the U.S dollar as the primary means of exchange.
However, this case could be immensely damaging for the company’s product.
Tether in its recent statement dismissed the accusations raised by Bloomberg. The statement concluded that the report published by Bloomberg “portrays the U.S Justice Department’s remarks as ‘news.”
However, the statement issued by Tether’s officials did not dare to respond to the allegations raised against them, however, the law experts criticized Tether’s statement by saying any clarification regarding the matter could be life-saving for the executive rather than playing a blame game.
Phil Potter, the CEO of Tether, publicly admitted that he joined the twin company Bifinex, by adopting “cock and bull” cock and bull strategy so he could have maintained the banking access. Tether also had connections with Crypto Capital Corp., which was accused of playing a critical role in the same fraud.
The report published by Bloomberg also touched on the reservations about the financial stability of Tether. However, Tether on the other hand responded that their USD-powered stablecoins are backed by the equal value of assets. But these are just words, as of today, the company has never conducted an official audit regarding the company’s finances.
Moreover, as of this writing, Tether has never published any authentic balance sheet for the customers to have a deeper look at the company’s financial stability claims.
Furthermore, back in February, the company paid the amount of $18.5 million after New York’s attorney general (NYAG) exposed that company’s top leadership mislead the masses regarding its backing fact and figures.
Hence, crypto scholars said that they are concerned about the outcome. In case executives got convicted and their involvement in fraudulent activities is revealed this could lead to great chaos. However, this would not have any catastrophic impacts on the overall crypto market.