Recently, a non-profit organization known as Consumers' Research launched a very aggressive campaign against the most popular stablecoin in the cryptocurrency world: Tether. The campaign, tagged "Tethered to Corruption," seeks to bring attention to what is claimed to be risky practices from Tether. This campaign involves a mix of TV commercials, billboards, and even a dedicated website.
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First of all, one should realize what Tether is. Unlike other cryptocurrencies, such as Bitcoin, Tether is a so-called stablecoin, pegged to some other stable asset like the US dollar to keep the volatility at bay. Due to this, it has become trendy among traders who desperately need to move funds between trades quickly without taking the risk of price fluctuations. However, the very stability of Tether depends heavily on the company's ability to maintain reserves backing up every USDT issued.
The Consumers' Research campaign says that Tether has no transparency about its reserves and presents an equivalence between it and that collapsed exchange, FTX—this is odd to me, as Tether doesn't seem much of an exchange company and never held customer funds. Tether seems to be a firm that mainly issues digital tokens, stating that these tokens are backed by reserves composed chiefly of US government Treasury bonds. Those sorts of bonds are, broadly speaking, considered pretty safe investments.
Critics, however, say these accusations are misleading and libelous. One of the central points of contention is the auditing and transparency of Tether's reserves. The campaign insinuates that Tether's reserves aren't auditable, but Tether simply continues to claim the exact opposite: that BDO audits its reserves as an independent accounting firm. Although there are certainly quibbles concerning their quality and nature, to state that none exist is patently wrong. It becomes essential for users to have accurate information to be able to make an informed decision.
Consumers' Research has another claim that Tether is currently under investigation. That would be true if not because most of the high-profile lawsuits against Tether were settled a while ago by US authorities. It's misleading to say it's still an active investigation without stating current evidence. Such statements create unnecessary fear and uncertainty within the market.
What makes this campaign even more interesting is the political context. Will Hild, the executive manager of Consumers' Research, appears to enjoy strong ties with politics and to be quite active in the political arena. The timing of the campaign just never came at a better moment than before the presidential elections. This move has evoked suspicions that there could be more involved than simply caring about practices developed by Tether. It’s possible that this campaign is also intended to influence voters and support certain political agendas.
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Consumers' Research has a history of running similar campaigns against various organizations. As they claim, they have come after companies and policies that supposedly promote "woke" culture and environmental, social, and governance legislation. This pattern shows their possible campaign against Tether as part of the bigger fight against politically adverse policies and standing in support of more aligned candidates.
As a person valuing transparency and accountability in the crypto world, I feel it's essential to look at such campaigns critically. That said, equally important is ensuring that, while holding companies accountable, the information being spread isn't riddled with hidden agendas. Misinformation can cause panic and harm to investors who rely on stablecoins like Tether for their day-to-day transactions.
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