Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark urged U.S. financial regulators to ban crypto firms from offering Tether USDT, describing the firm as a “mammoth house of cards.”
In a May 9 long-form Twitter post, Stark touched on different issues plaguing Tether to drive home his point. According to him, his experience and study of markets and financial statements over the past years make him believe that the stablecoin issuer could be the next domino to fall.
Tether operates in a regulatory vacuum
Stark noted that Tether has operated without a regulatory constraint as it has no legal framework guiding its operations in the U.S. He added that there are no “U.S. requirements on how reserves must be invested, nor any requirements for audits or reporting.”
“Tether’s fundamental business, the essence of everything Tether does, is tied exclusively to Tether’s financial reserves. Yet those reserves remain unaudited, unconfirmed and therefore dubiou
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