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Brad Garlinghouse Responds to Tether Accusations, Says USDT is “Important”

Last Updated May 14, 2024 11:30 AM
Eddie Mitchell
Last Updated May 14, 2024 11:30 AM
Key Takeaways
  • Brad Garlinghouse has clarified his recent comments regarding Tether and the U.S. government.
  • Tether’s CEO issued a comprehensive response to, shedding light on USDT’s commitment to compliance and security.
  • Garlinghouse believes Tether is “hugely important” to the ecosystem.

Following a podcast appearance in which Ripple (XRP) boss Brad Garlingouse appears to be questioning Tether’s integrity, Tether’s CEO ardently refuted these claims, describing Garlinghouse as “uninformed.”

Now Garlinghouse wants to clear up what he claims is a gross misrepresentation of his point.

Tether is “Important”

Garlinghouse’s comments on Tether and the U.S. government “going after” them were exceedingly brief. But they did follow a brief conversation on “black swan events” such as FTX, which can bring an ecosystem down in a very unpredictable fashion.

This was seen as the first volley in what could have become a crypto infight between Ripple and Tether. Tether’s CEO quickly responded in defense of the firm’s ecosystem and integrity. Soon after, Garlinghouse took to X to clear the air.

According to Garlinghouse, what he was getting at was the significance of USDT in the ecosystem, describing it as “hugely important”. Furthermore, given the U.S. government’s intentions to have greater control over USD-backed stablecoins. He writes:

“Tether, as the largest player, is in their line of sight.

With that said and done, Ardoino is still yet to respond. However his initial response, albeit serious in tone, did give some insights into the operations of USDT.

Tether CEO Accuses Ripple Boss of Spreading USDT FUD

CEO Brad Garlinghouse recently claimed the U.S. was clearly “going after” the world’s leading stablecoin issuer.

Considering that Ripple is still under investigation by the U.S. Securities and Exchange Commission (SEC), and the fact that Ripple intends to launch its own stablecoin, Garlinghouse’s comments carry an air of hypocrisy.

Tether Addresses Garlinghouse

In a recent interview on the World Class podcast, Garlinghouse alluded to the U.S. government’s stance on Tether, hinting that regulatory scrutiny may be on the way.

More specifically, he was commenting on unpredictable industry “Black Swans” like FTX’s Sam Bankman-Fried (SBF) and Binance’s Changpeng “CZ” Zhao, when he then said:

“[…]the U.S. government is going after Tether, that is clear to me. I view Tether as a very important part of the ecosystem, and I don’t know how to predict the impact that will have on the rest of the ecosystem.”

Ripple’s intentions to launch its very own stablecoin make Garlinghouse’s, vague at best, statements seem a little hypocritical, at least that’s what Tether’s CEO thinks.

Tether Bites Back

Describing Garlinghouse as an “uninformed CEO”, Tether CEO Paolo Ardoino pulls no punches in addressing Garlinghouse’s short, brief, yet impactful statement.

Taking to social media, Adoino provided a comprehensive breakdown of Tether’s commitment to legitimacy, ecosystem security, longevity, and regulatory compliance.

Ardoino highlights that USDT is the most used stablecoin on the market, spanning hundreds of millions of users based primarily in developing and emerging markets. With this in mind, he notes that USDT has maintained and grown  this ecosystem, writing:

USDT proved overtime to have strong price stability, highly liquid reserves, top tier custodians and profound compliance.

He then goes on to list Tether’s many collaborations with the FBI and other U.S. agencies, as well as “124 law enforcement agencies across 40+ different countries”, freezing some $1.3 billion USDT used in “scams, hacks, ” and money laundering (ML).

A Miscommunication

What was previously thought to have been the beginning of a fresh crypto spat, has turned out to be somewhat of a miscommunication.

Based on his response, Garlinghouse feels his comments have been blown out of proportion. Given Ripple’s unfortunately intimate relationship with the U.S. SEC, he could have been offering a friendly heads-up to a fellow crypto-leader. But with the mention of Tether following Garlinghouse’s comments on black swan events, the context of his message seemingly became distorted.

Ardoino has since resumed posting to X, though is yet to reply to Garlingouse.

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