Tether CEO to Skeptics: "We Wear Your Loathing With Pride"

Tether’s USDT Downgrade Brings Old Arguments Back to the Front

During the sleepy session the day before Americans celebrated Thanksgiving, S&P Global slashed the rating on Tether’s USDT from 4 to 5, the weakest level on its stablecoin stability scale (yes, the agency whose ratings shenanigans helped enable the global financial crisis has a stablecoin stability scale).

Behind the downgrade were usual concerns about the opacity of Tether’s reporting combined with something somewhat new: bitcoin now compromises more than 5% of the reserves backing USDT — thus continued declines in BTC’s price could lead to potential undercollateralization.

“We wear your loathing with pride,” said Tether CEO Paolo Ardoino, shortly after the S&P move. Taking note of the well-trodden previous failures of ratings agency models, Ardoino said, “the traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system … Tether instead built the first overcapitalized company in the financial industry, with no toxic reserves.”

Doge, crypto and the end of the lol era

Now, it is always unwise to read too much into the wild gyrations of crypto, but it has fallen substantially over the past two months, with bitcoin suffering its worst crash since 2022. If you are to take the crypto “market cap” seriously (I don’t, but it’s the only gauge we have), more than a trillion dollars has been wiped out since early October — about a quarter of the market’s value. And this comes despite the US president’s full-throated support of it (not to mention entanglement in it) and swaths of institutional investors who now insist this is a serious asset class.

Crypto is not, and never was, a serious asset class. And what we are seeing in these wobbles is a gradual move away from the era of lol that has defined the years since Trump became president for the first time. It was, after all, during his first year in office in 2017 that ICO-mania took off, allowing chancers to raise millions of dollars for dubious, often non-existent projects via “initial coin offerings”.

New York Bill Would Boost Penalties for Financial Fraud Crimes

A New York lawmaker is introducing a bill to toughen criminal penalties for financial crimes, arguing the state needs to step up after the Trump administration gutted the Consumer Financial Protection Bureau.

Corporations with annual revenues greater than $100 million that are convicted of a felony offense under New York state laws would face stiffer penalties under the bill sponsored by state Sen. Zellnor Myrie (D), who shared the text of the bill exclusively with Bloomberg Government. Currently, fines assessed on companies convicted of certain criminal offenses can’t exceed $500,000.