Ripple CEO Brad Garlinghouse has warned that the US government is targeting Tether, the issuer of the largest stablecoin by market capitalization.
Garlinghouse made this revelation while speaking on a new episode of the World Class podcast with Chris Vasquez.
US Government is Going After Tether
According to Garlinghouse, the US’s potential action against the stablecoin issuer could trigger a significant disruption in the crypto space.
“The US 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 it would have on the rest of the ecosystem,” Garlinghouse said.
This assertion comes amid revealing finds about the exploitation of USDT by terrorist organizations and sanctioned countries to evade US financial restrictions. In April, Adewale Adeyemo, the US Treasury Deputy Secretary, testified before the Senate Banking Committee, highlighting Russia’s growing use of alternative payment methods such as Tether’s USDT to sidestep economic sanctions.
“We’ve seen Russia increasingly turning to alternative payment mechanisms—including the stablecoin tether—to try to circumvent our sanctions and continue to finance its war machine,” Adeyemo wrote.
Simultaneously, a UN report shed light on the widespread use of cryptocurrencies for money laundering, with USDT on the TRON blockchain emerging as a prominent vehicle, particularly within illicit online gambling platforms.
Read more: A Guide to the Best Stablecoins in 2024
Despite these concerns, Tether emphasizes its adherence to compliance standards and collaboration with law enforcement to combat illicit financial activities. The company has taken proactive measures, including freezing addresses holding a substantial amount of its tokens involved in unlawful activities.
Tether’s USDT maintains its position as the leading stablecoin by market capitalization, boasting a circulating supply of approximately $110 billion. Notably, the company achieved a historic net profit of $4.52 billion in the first quarter.
Yet, despite the controversies surrounding the largest stablecoin issuer, Ripple has entered the sector. Last month, the company announced its intention to introduce its stablecoin.
“Ripple’s move into stablecoins isn’t just about innovation; it’s about contributing to the XRPL ecosystem and setting the stage for a more robust and diverse crypto landscape,” Ripple said.
Read more: Stablecoin Regulations Around the World
Since the announcement, the company has not provided additional details about the asset. However, Ripple CTO David Schwartz hinted that the stablecoin’s name could be disclosed in June.
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