A fervent discourse has been ignited on Twitter between John Reed Stark, a financial reporting expert, and Paolo Ardoino, the Chief Technical Officer of Tether. This verbal joust was sparked by Stark's critique of the overall health of the company.
In his publication, Stark elaborated in depth, leveraging various sources of information and his extensive experience, on why he perceives Tether as an unreliable company and forecasts its insolvency. His arguments can be distilled into several key points:
1. A lack of transparency and deceitful declarations from the upper echelons, which have been promising a comprehensive audit for seven years but ultimately evade it.
2. Insufficient regulation, allowing Tether to avoid filing reports, confirming, and guaranteeing the backing of their stablecoins, creating immense risks for investors and users, considering the critical importance of reserve funds for the company.
3. An unclear hierarchy of management where the technical director frequently comments on financial matters, while the activities of other managers remain obscured.
4. Positioning attestation as an alternative to financial auditing. However, such an approach is fundamentally flawed, as it is not mandatory and assesses data at a specific point in time, whereas an audit is performed to detect serious problems and subsequently rectify them.
John also highlighted that the amalgamation of these reasons and earlier legal proceedings against Tether elevate it to the level of companies with which one should not engage. Paolo Ardoino responded, succinctly providing a link to the latest reserve report.
Responding to the CTO's commentary, John made another publication. He reiterated his stance on the incorrect comparison between attestation and traditional audit and listed all the negative incidents related to Tether: a court decision on the unverifiability of reserve data, a prohibition on operating in Ontario, potential FBI and US Department of Justice investigations for bank fraud, and even sponsoring terrorism.
In conclusion, he underscored the importance of registering with the SEC, which ensures transparency through regular checks, stable reporting, and informing users about risks. Essentially, he enumerated all the official statements of the commission, although according to Paradigm's analysis, in its current format, registration is absolutely untenable for cryptocurrency projects.
Evidently, Paolo also subscribes to this position, meticulously outlining why all these suggestions are inapplicable to his company. Here are a few key points:
1. Tether does not operate with American clients; its primary markets are countries with poor public access to the banking system.
2. The company abides by all American sanctions, conducts rigorous checks on its employees, including directors, and all clients, in line with the AML banking standard.
3. All transactions undergo rigorous scrutiny with Chainalysis, a proactive accomplice in unmasking culprits globally. Concurrently, Tether collaborates with law enforcement agencies worldwide, responding to inquiries at a pace unrivaled by any banking institution, courtesy of blockchain technology's unique attributes.
4. The corporation is registered with FinCEN, submitting regular reports of suspicious activities and promptly immobilizing stolen funds in the aftermath of exchange or protocol breaches.
5. Tether curates its reserves, taking into consideration the myriad risks and the necessity to safeguard the end user. Consequently, the team retains a significantly larger amount of funds than necessary to fulfill their obligations.
In the concluding segment, Paolo declared that against the backdrop of failing banks, their system appears far superior to traditional establishments. Yet, despite this, the company is incessantly under pressure from critics and the media. In his view, such obsession might result in genuinely problematic projects and financial organizations going unnoticed.
Seemingly, that was it. However, John decided not merely to continue the discussion, but also to broach the subject of cryptocurrency's ineffectiveness as a tool for social equality and as an alternative to the banking system. Ultimately, examining this dispute from the sidelines, it seems to embody the clash of two disparate generations: a seasoned businessman from the traditional financial system and an expressive crypto-enthusiast, fervently believing in his concept.
In essence, this is how the users have divided in the comments: some argue that Tether does not allow for the conversion of tokens in large volume via the official site, while others recount how USDT has been their salvation in an attempt to preserve their savings. Who will be proven correct – only time will tell, but it can be confidently stated now: companies should indeed strive for greater transparency, and critics should refrain from making hasty conclusions about new technologies based on one or a few projects.
