Consumers’ Research criticized Tether for exposing users to significant risks, highlighting the lack of an independent audit to confirm that USDT is backed 1:1 by the US dollar. The organization described Tether's business practices as a disaster waiting to happen for consumers.
The report also pointed out Tether's history with bad actors and false claims, including investigations by the US Department of Justice and penalties imposed by New York and the CFTC. These factors raise concerns about Tether’s financial safeguards.
Tether CEO Paolo Ardoino admitted that the company relies on attestations for its reserves and is seeking a top global auditor, although the Big Four firms are hesitant due to reputational risks. Despite these concerns, Tether remains highly profitable, outperforming major asset managers like BlackRock.
Tether's business model involves buying US bonds and investing in Bitcoin, leading to substantial profits. A UK court recently ruled that Tether's USDT qualifies as property, following the UK's recognition of crypto assets as personal property.
