• A digital billboard accusing Tether of corruption was featured in Times Square.
• Historically, stablecoins often depend on controversies surrounding respective parent companies.
• Tether recently launched a new synthetic dollar backed by gold.

On Tuesday, Consumers’ Research began a campaign against Tether, the business that issues USDT stablecoins, claiming that it poses a risk to customers and casts doubt on its potential to become the next FTX.

Tether is being accused of criminal offenses after being accused of corruption

Consumers’ Research has accused USDT issuer Tether on multiple occasions regarding its connections to the defunct FTX and its association with illicit activity.

The issuer was depicted on a recent Times Square display under the heading “Tether to corruption,” subsequent to a press release from Consumer Research announcing that the organization was responsible for the advertisement.

CEO of Consumers’ Research, Wild Hild, stated multiple allegations alleging that prior to its demise, the company had some illicit ties to Sam Bankman-fried FTX.

According to other data from the blockchain analytics company TRM Labs, Tether was connected to $19.3 billion in illicit transactions in 2023, making it the most popular stablecoin for criminal activity. “Approximately 1.63% of Tether (USDT) volume was linked by TRM to illicit activity, compared to 0.05% of USDC,” said the research.

Consumers’ Research, meantime, started several other efforts to expose the biggest stablecoin issuer’s ties to these unscrupulous individuals.

“We are shining a light on Tether for their suspicious business practices, including a decade-long refusal to perform an audit and the routine use of the product by terrorists and traffickers of drugs and humans,” Will Hild, our executive director, said.

Due to the FUD resulting from a guilty verdict, Tether’s USDT might depend on the US dollar. In controversy, stablecoins frequently lose their peg.

One well-known example is the algorithmic stablecoin dependence between LUNA and UST, which caused a protracted bear market period in the cryptocurrency industry.

March 2023 saw a depletion of Circle’s USDC due to its exposure to the collapsing Silicon Valley Bank (SVB). After learning that Circle has substantial USDC reserves worth $3.3 billion locked up at SVB, several members of the cryptocurrency community voiced concerns.

Despite the allegations, Tether intends to grow and has launched a new stablecoin called Alloy (aUSDT) that is backed by gold.