Tether and the doubts about the 5 billion mint: between politics, transparency, and market impacts

Tether shakes the market with a mint of 5 billion dollars in just five days. Amid political entanglements, accusations of opacity, and ongoing investigations, the influence of the stablecoin on the crypto ecosystem continues to grow.

Let’s see all the details in this article. 

Tether and the 5 billion mint: what does it mean for the market?

Tether, global leader among stablecoin, is in the spotlight after having minted over 5 billion dollars in just five days.

This development, which occurred between November 6 and 10, injected a significant amount of liquidity into the cryptocurrency market, raising however numerous questions about reserves, transparency, and political implications.

The issuance was accompanied by a rapid increase in the value of Bitcoin, which reached new all-time highs, pushing the crypto ecosystem to record levels. 

However, the impact of this massive injection of capital goes beyond the simple market movement, highlighting deeper issues related to the governance of Tether and its growing geopolitical influence.

One of the most controversial aspects of Tether’s activity is the connection with Howard Lutnick, CEO of Cantor Fitzgerald, who holds a 5% stake in the stablecoin. 

Lutnick, a prominent figure in Donald Trump‘s political transition team, has publicly defended Tether, but without providing concrete evidence on the solidity of its reserves.

This connection has attracted the attention not only of cryptocurrency enthusiasts but also of regulators and political observers. 

The appointment of Lutnick as a potential Secretary of Commerce in the Trump administration raises further doubts about possible conflicts of interest and the potential political influence on Tether’s operations.

Despite the criticisms, Cantor Fitzgerald has become a strategic banking partner for Tether at a time when many global banks have distanced themselves from the stablecoin. 

This role strengthens Lutnick’s position as a central figure in the management of reserves and in the financial stability of Tether.

Impact on the market and transparency under accusation

The mint of 5 billion dollars has brought Tether’s market capitalization to over 132 billion dollars, consolidating its position as the dominant stablecoin. 

This increase coincided with a rally of the main cryptocurrencies, including Bitcoin, which surpassed the 80,000 dollar threshold and is now approaching the historic milestone of 100,000 dollars.

However, the lack of transparency of Tether continues to raise concerns. 

Despite the attestation reports released by BDO Italia, many industry experts, such as Justin Bons of Cyber Capital, have questioned the credibility of Tether’s reserves, describing it as potentially more risky compared to other institutions that have already collapsed in the past.

The Commodity Futures Trading Commission (CFTC) and the New York Attorney General’s office have already fined Tether in the past for false statements about reserves and suspicious financial operations. 

Despite these sanctions, the stablecoin has continued to dominate the market, with a share exceeding 75% of the stablecoin sector.

Furthermore, Tether recently announced a strategic investment of 100 million dollars in the South American agricultural company Adecoagro, acquiring a 9.8% stake. 

This step has raised further doubts about the governance of Tether and the opacity of its investment strategies. Sean Lee, co-founder of IDA Finance, emphasized how the absence of detailed transparency threatens the trust of the ecosystem. 

To these criticisms are added the statements of many observers who demand greater guarantees on Tether’s financial operations, considering them fundamental for compliance with regulations and for market stability.