Tether's Dominance Sparks Concerns Over Crypto Industry Influence

Golden Finance reports that Tether's market share has exceeded 75% of the entire stablecoin market, raising concerns about its influence on the cryptocurrency industry. Justin Bons, founder of Cyber Capital, worries that Tether might be a bigger scam than FTX. Bons wrote in an X post on September 14th: "Tether is one of the biggest existential threats to the entire crypto ecosystem. Because we have to trust them to hold $118 billion in reserves, which they provide no proof of. Even after being fined by the CFTC in 2021 for misrepresenting their reserves."

Tether was indeed fined $41 million by the U.S. Commodity Futures Trading Commission (CFTC) in 2021 for falsely claiming that USDT was fully backed by reserves.

Sean Lee, co-founder of IDA Finance, notes that while FTX's collapse was due to its inability to handle a large withdrawal of $6 billion from customers within three days, Tether's potential collapse is linked to its banking partners. "Regardless of whether it's a bear market, the possibility of Tether collapsing is more related to its structural connection to underlying assets and banking than market fluctuations. Otherwise, USDT would have suffered losses in the last bear market, but in reality, USDC decoupled due to its reliance on SVB and Signature Bank."