Ripple CEO asserts that the US government is unmistakably targeting Tether

Ripple CEO Brad Garlinghouse has expressed his belief that the United States government is actively targeting stablecoin issuer Tether, a development that could have an unpredictable impact on the cryptocurrency markets. Speaking on the World Class podcast on May 10, Garlinghouse stated that there would undoubtedly be another crypto-related black swan event similar to the collapse and subsequent exposure of fraud at FTX. While he did not provide any further details or suggest that potential U.S. action against Tether would be the next black swan event, Garlinghouse described it as an “interesting one to watch.” He emphasized the importance of Tether in the crypto ecosystem but admitted that he couldn’t predict the consequences of U.S. regulatory action against the stablecoin. These comments from Garlinghouse come as Ripple prepares to launch its own stablecoin in 2024.


Garlinghouse’s observations are in response to the activities of Tether Holdings, the parent company responsible for issuing and managing the Tether (USDT) stablecoin through its various subsidiaries across the globe. In October 2023, U.S. Senator Cynthia Lummis and Representative French Hill wrote a letter to the Department of Justice, urging them to assess the extent to which Binance and Tether are aiding terrorism through their provision of resources and support. Tether responded to the letter, asserting its cooperation with law enforcement and its commitment to working with authorities worldwide. In November 2022, Bloomberg reported that U.S. Attorney Damian Williams took over a previous Justice Department investigation into Tether’s alleged concealment of crypto-linked funds from banks. Tether has also faced criticism for its lack of transparency regarding the reserves backing USDT and has published quarterly third-party audits in recent years. Additionally, the company paid a $41 million fine to the Commodity Futures Trading Commission in October 2021 for misrepresenting its reserve holdings to customers and for insufficient fiat reserves to back USDT on most days between June 1, 2016, and February 25, 2019.
Ripple’s future plans include the launch of a U.S. dollar stablecoin in 2024. Ripple’s chief technology officer, David Schwartz, revealed in an interview with Cointelegraph in April that the stablecoin would be backed by dollar deposits, short-term government Treasuries, and other cash equivalents. As the crypto industry navigates through potential risks, such as depegging and bank runs, the stability of stablecoins remains a concern.