TechFlow news — According to its official blog, Tether, the issuer of USDT, has publicly criticized The Wall Street Journal (WSJ) and CoinDesk, stating that these media outlets consistently claim Tether is on the verge of collapse whenever cryptocurrency prices drop more than 15%, while completely ignoring structural frauds that have destroyed billions in wealth and brought down nearly all lending institutions—such as FTX.
Tether analyzed CoinDesk's position, pointing out that CoinDesk is a subsidiary of DCG, which is also an investor in Circle—the direct competitor of Tether. Although CoinDesk has scrutinized Tether for years, including attempting to obtain private reports Tether submitted to the New York Attorney General under the banner of transparency, it has failed to demand the same level of transparency from its own parent company. Grayscale’s GBTC, under DCG, was a key pillar behind the failures of BlockFi and Three Arrows Capital. Genesis, another DCG subsidiary, not only contributed significantly to the FTX collapse—providing worthless collateral in loans to FTX, leading to disaster across the industry and for FTX customers—but also facilitated transactions and borrowed against valueless UST collateral, exacerbating the Terra meltdown.
Tether stated that The Wall Street Journal’s article questioning Tether’s secured loans contains numerous misunderstandings about Tether and USDT. Most notably, the article incorrectly claims that Tether’s USDT-backed loans are denominated in USDT, exposing Tether to risks if USDT’s value falls. In reality, Tether’s secured loans are over-collateralized and, when necessary, further supported by additional equity from Tether. 82.45% of Tether’s total reserves consist of U.S. Treasury bills and other cash equivalents, which are currently yielding multi-year highs.
Furthermore, The Wall Street Journal overlooked a key point: in secured lending, fluctuations in the USDT token price are negligible because such movements reflect trading value, not the redemption value of the underlying collateral. The real focus should be on the quality of the collateral—not the day-to-day price of USDT. Tether explained how its lending program operates similarly to private banking and emphasized that Tether does not acquire bad loans from financially distressed companies; instead, it provides over-collateralized loans to qualified clients while maintaining full control over the collateral or pledged assets.
Previously, The Wall Street Journal reported that Tether’s growing loan portfolio increases risks for the stablecoin and broader cryptocurrency ecosystem.Original link
