Key Takeaways
- A Tether shareholder reportedly tried to sell shares at a price that undercut the company’s fundraising efforts.
- Tether described the attempt as “reckless” and stepped in to prevent the sale.
- In the future, the company is considering tokenizing equity to improve liquidity.
With Tether in talks to close a private placement at a $500 billion valuation, at least one rogue shareholder has attempted to offload stock at a discount, Bloomberg reported on Friday, Dec. 12.
After stepping in to prevent the sale, the USDT issuer called any attempts to circumvent the process established by management “imprudent” and “reckless.”
Tether Investors Impatient To Cash Out
For Tether’s early investors, the latest fundraising prospect presents an opportunity to realize profits from what has become one of crypto’s most significant success stories.
However, with only a 3% stake up for grabs and Tether’s leadership ruling out an IPO anytime soon, liquidity is limited.
The stablecoin company is listed on EquityZen, which suggests that at least some shareholders are open to selling.
If private sales have taken place in the past, however, Tether has done a good job of keeping them out of public view.
According to an inside source cited by Bloomberg, Blockchain Capital was preparing to partially exit its position, but held off on the deal due to Tether’s private placement plans.
“Reckless” Shareholder Attempts To Circumvent Official Process
Amid ongoing negotiations around the proposed private placement, which could raise up to $20 billion, Tether stepped in to prevent at least one existing shareholder from selling shares separately at a lower price.
Tether has “received clear confirmation that these efforts will not proceed,” the firm told Bloomberg.
“It would be imprudent, and indeed reckless, for any investor to attempt to circumvent the established process […] or to engage with parties not authorized by Tether’s management,” the statement added.
USDT Issuer Mulls Tokenizing Shares
Once it finalizes its latest stock sale, Tether is considering tokenizing equity to improve liquidity and make it easier for stakeholders to transfer shares, Bloomberg reported.
Crucially, neither El Salvador nor the British Virgin Islands, where Tether and its parent company are domiciled, cap the number of shareholders for private companies.
Depending on how permissionless they are, this creates the prospect that Tether stock tokens could function as de facto public shares, while circumventing the reporting requirements of a public listing.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
