Tether continues to be the target of outdated, inaccurate, and misleading coverage and allegations from the Wall Street Journal (WSJ) whose latest report insinuates that Tether operates on the outskirts of regulation. This conflicts with the reality that Tether operates under substantial financial regulations and cooperates on a near-daily basis with global law enforcement. This includes regular cooperation with the U.S. Department of Justice and other top tier US agencies, while not servicing US-based customers.
Tether has long been a popular target for reporting from the WSJ (and other legacy media), however as the high-profile failures of FTX, Celsius, and Genesis among others revealed, they have rarely focused on the right targets.
From January 1st of 2021 to January 1st of 2022 the WSJ published 84 articles about or mentioning Tether, the vast majority of them negative.
During the same time period, the WSJ published 28 articles about or mentioning FTX, almost all of them positive.
The goal of the media, and investigative reporting, is to identify important public interest stories, ideally before they happen. Where do things stand a year later?
Many of the shiny companies that mainstream media (MSM) like the WSJ supported during 2022 have been revealed to be among the largest financial failures in history, resulting in the catastrophic loss of funds for countless users and investors. Tether, on the other hand, has continually met its commitment to increased transparency, cooperation with regulators, and adjusting its reserves (Tether completely reduced all commercial paper holdings to zero in 2022).
Many of these things were actions Tether’s critics, including the WSJ, insinuated Tether would never be able to do. However, rather than recognizing the fact that Tether has been able to continuously respond to allegations with direct actions, legacy media outlets continue to move the goalposts.
Even against one of the largest incidences of volatility the industry has ever experienced, Tether continued functioning exactly as its users would have expected. During the height of the Terra Luna collapse, Tether was able to redeem over 10% of outstanding USD₮, equal to $7 billion USD, within 48 hours. Tether processed redemptions for close to $20 billion from market peak to trough. Banks have historically failed under far less pressure.
Contrary to the WSJ’s claims, Tether has actually demonstrated time and time again that it is a committed partner of global law enforcement and has built and maintains world-class compliance programs.
Like all traditional financial institutions, Tether guards itself against money laundering, terrorist financing, nuclear proliferation, and sanctions risks through policies and procedures that seek to limit the chances that criminal elements are onboarded to the Tether platform.
In fact, Tether currently has less than 1000 active users and an extremely strict KYC/AML standard that follows the Bank Secrecy Acts standards as a minimum, as Tether Limited is a FinCEN registered MSB. Due to this fact, Tether is able to conduct enhanced due diligence on all customers in order to understand the provenance of funds deposited with the platform, and the purpose of the relationship. Each customer receives a higher level of attention than most traditional financial institutions as Tether screens for these various risks. As well, any suspicious activity is filed by Tether Limited and Tether International Limited to FinCEN or the BVI FIA, as applicable.
Tether is also a proud partner of global law enforcement and routinely has an open dialogue with law enforcement agencies across the globe, including the U.S. Department of Justice, as part of our commitment to cooperation, transparency, and accountability. Tether conducts Sanctions and blockchain screening to ensure its customers' funds are not connected to high-risk wallets.
Such risk mitigation strategies are to be expected for Primary Markets but Tether goes above and beyond these measures and serves the public by voluntarily cooperating with law enforcement agencies worldwide to freeze criminal wallets, help victims recover funds as applicable, and dissuade criminals from using Tether tokens for criminal purposes. Worldwide.
While much of Tether’s assistance in this regard remains non-public, over the years we have assisted law enforcement in well over 160 investigations across four continents and currently have over ~$400 million frozen as a result of various investigations. In August 2021, in a matter that did receive some public attention, Tether first froze and subsequently returned to their rightful owners approximately $33 million in Tether tokens that had been stolen from the Poly Network, a decentralized finance platform.
Tether has also partnered with IHOPE to combat childhood trafficking, a cause Tether is passionate about supporting to prevent cryptocurrency from becoming a tool that facilitates child trafficking.
“Working alongside law enforcement, lawmakers and standard-setting bodies worldwide, Tether is committed to being a positive force in the crypto space by highlighting the risks of child exploitation and to help organise sensible risk mitigating controls in the cryptocurrency industry. We are especially interested in improving the ability of cryptocurrency businesses to identify transfers related to online CSAM marketplaces and report them to the authorities.” - Paolo Ardoino, CTO at Tether.
Biased coverage from legacy media outlets like the WSJ will not stop Tether from continuing to build a global financial infrastructure that delivers real benefits to people in emerging markets. Tether continues to be utilized globally by people and businesses to meet financial needs the Wall Street Journal's namesake, Wall Street, long ago abandoned.
In the same manner that the WSJ gave many actors (among which FTX) nearly uniformly positive coverage, and was almost always critical of Tether, it raises an interesting question- what if a US VC-funded Fintech company had accomplished what Tether has accomplished?
Would the Wall Street Journal coverage look different if Tether was an exciting startup out of Silicon Valley funded by their Wall Street buddies ?
Tether has successfully provided tens of millions of users globally with low-cost, reliable, always-on, services. While the WSJ certainly has the right to criticize Tether if it feels that criticism is warranted, it is notable that they don't write many stories about all of the positive things Tether has accomplished as the world's largest and most widely used stablecoin. Accomplishments which certainly could be said to surpass many of the other startups that do receive positive coverage from the WSJ.
This poor track record of separating signal from noise in the crypto industry makes a rehashing of allegations from 2018 seem like more of the same from the WSJ.
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