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A splashy media campaign linking Tether to crime and corruption is raising questions as to the motivations of the campaign’s U.S. right-wing backers.
On June 18, a press release hailed the launch of “a multi-million-dollar campaign targeting Tether,” the company behind USDT, the world’s largest stablecoin by market capitalization. The release called USDT “a so-called stablecoin that is commonly used by the world’s worst actors and attracted well-deserved scrutiny about its legitimacy.”
The release was issued by Consumers’ Research, whose executive director Will Hild was quoted saying his group is “shining a light on Tether for their suspicious business practices, including a decade-long refusal to perform an audit and the routine use of the product by terrorists and traffickers of drugs and humans.”
Hild went on to say, “We fear that that Tether may very well be the next FTX. Consumers should be weary [sic] of any so-called stablecoin that refuses to properly certify that they actually hold the assets they claim.”
The pricey anti-Tether campaign will consist of a TV ad “backed by a seven-figure national buy,” a website (TetheredToCorruption.com), a massive digital billboard in New York’s Times Square, mobile billboards in select cities—including Washington and New York City—plus a targeted digital campaign.
The Tetheredtocorruption site is a repository of unflattering articles about Tether recently published by both mainstream media (Wall Street Journal, Bloomberg) and dedicated ‘crypto’ news sites. The site carries a banner reading: “Terrorist financing, fraud investigations, and a close relationship with China. Can you really trust Tether?”
The press release was accompanied by the publication of an article on Townhall.com, a U.S. right-wing website, titled Is This the Next FTX? Another article appeared on the Daily Mail website, which ranks among the top-25 sites in the U.K. (top-five among news sites) and in the top-150 globally. The right-leaning Mail garners around 40% of its global audience from the U.S.
The Mail quoted Hild saying USDT “seems to be sort of the go-to coin for people who either want to avoid U.S. sanctions or break the law.” Hild drew comparisons with “FTX’s illegal activity,” saying Tether’s unwillingness to subject its purported $112 billion worth of fiat reserves to a third-party audit makes USDT “sort of a fellow traveler with the Ponzi scheme aspect of [FTX’s demise].”
Hild added that Tether “is well-known for its nefarious ties to criminal activities. Last year Tether was linked to nearly [US$]20 billion in illicit transactions. Tether has also been used by Hamas, Al Qaeda, ISIS and others, with known terrorist-linked financial transactions in the millions.”
A Tether spokesperson issued the company’s boilerplate response to such allegations, telling the Mail that USDT and other Tether tokens are “pegged at 1-to-1 with a matching fiat currency and are backed 100% by Tether’s Reserves.” The spokesperson further claimed that “the repeated criticisms concerning Tether’s reserves been thoroughly disproven.”
Do your own research
Consumers’ Research is a U.S.-based non-profit founded nearly a century ago. Originally touted as an impartial rating service for consumer-oriented products, the organization fell into decline and was largely inactive until a few years ago, when it was revived as a right-wing group targeting corporations that espoused ‘wokeness,’ a belief in climate change and/or environmental, social and corporate governance initiatives (ESG).
Consumers’ Research is also a major funder of the State Financial Officers Foundation (SFOF), a Republicans-only group that describes itself as “the premier free-market organization bringing financial officers together with the nation’s top private sector companies and organizations.” In 2023, the SFOF established five task forces focusing on subjects like investment oversight, banking, and cybersecurity.
In 2023, Hild told the New York Times that prominent conservative activist Leonard Leo was an adviser to Consumers’ Research, while the Washington Post called Leo one of Hild’s mentors. Leo and the dark money group Donors Trust provided Consumers’ Research with the millions that allowed it to embark on its anti-woke crusade.
Leo, a former VP/current co-chair at the Federalist Society, has been credited with steering many of Donald Trump’s federal court appointments and has recently come under fire for lavishing Supreme Court Justice Clarence Thomas with free vacations and other pricey perks.
In April, NBC News reported that Leo had attended an event at Trump’s Mar-a-Lago club in Florida that attracted a couple hundred “tech-populist” guests, including Shapeshift founder Erik Voorhees.
That event was hosted by the Rockbridge Network, a group co-founded by Sen. J.D. Vance (R-OH) prior to his entering politics. NBC claims Rockbridge is making a major voter registration push based on ‘issues important to them.’
Rockbridge donors include Peter Thiel, who has invested in various ‘crypto’ projects (and has occasionally been burned). Thiel’s Founders Fund VC was also ‘credited’ with fueling the panic that ultimately led to the 2023 collapse of Silicon Valley Bank.
In June, Jacob Helberg, an adviser to Thiel’s Palantir software firm, quoted Trump saying the Biden administration’s “crusade against crypto will grind to a halt within one hour of a second Trump administration.”
In 2021, Thiel publicly mused as to whether the BTC token “should also be thought of in part as a Chinese financial weapon against the U.S.” This is an interesting comment, given that Trump’s recent about-face endorsement of all things crypto’ has generally been framed in nationalistic terms.
Knives out
In a not-so-cryptic tweet responding to the Consumers’ Research campaign, Tether CEO Paolo Ardoino stated simply: “competitors sono disperati” aka ‘competitors are desperate.’ Which begs the question: which of Tether’s competitors might be funding this attack? Or is it a Murder on the Orient Express scenario, in which they all did it?
Consider this: the aforementioned Thiel has funded stablecoin issuer Paxos, which last August teamed up with PayPal (NASDAQ: PYPL) to issue a new USD-backed stablecoin (PYUSD). Thiel co-founded PayPal and served as its CEO until 2002.
Then there’s Tether’s biggest rival Circle, issuer of the USDC stablecoin. Circle reps have become increasingly aggressive in suggesting the U.S. government might want to stick a fork in Tether by targeting the (alleged) custodian of Tether’s (alleged) stash of U.S. Treasury bills, Wall Street giant Cantor Fitzgerald (NASDAQ: ZCFITX).
And then there’s Ripple Labs, the issuer of the XRP token, that announced plans to issue its own USD stablecoin (since dubbed RLUSD) in April. The following month, Ripple CEO Brad Garlinghouse told a podcast that it was “clear” to him that the “U.S. government is going after Tether” due to its prominent role in the ‘crypto’ crime ecosystem.
All of the above are U.S.-based companies and, therefore, subject to U.S. law. Late last year, the Treasury Department went on record warning of the consequences of allowing “dollar-backed stablecoin providers” based outside the U.S. to continue ignoring anti-money laundering (AML) and combating the financing of terrorism (CFT) requirements.
On June 13, Paul Ryan, former Republican speaker of the House of Representatives, wrote an op-ed in the Wall Street Journal claiming that embracing USD-based stablecoins could “provide demand for U.S. public debt and a way to keep up with China.” Warning that “the dollar’s primacy is constantly under threat,” Ryan suggested that stablecoins are one of the “new ways to make the dollar more attractive.”
Ryan went on to promote passage of the various’ payment stablecoin’ legislative efforts currently languishing in Congress. These bills favor domestic stablecoin operators over the likes of Tether, particularly on their insistence on actual audits of an issuer’s fiat reserves.
Bald ambition
The Coinbase (NASDAQ: COIN) exchange has partnered with Circle on USDC, and the New York Times reported this week that Vivek Ramaswamy, the anti-woke crusader who likes to take credit for Trump’s pro-crypto pitch, met privately with Coinbase CEO Brian Armstrong last week to encourage him to officially hop on the Trump bandwagon.
For the record, Armstrong appears on board with Consumers’ Research’s other corporate priorities. On June 17, Armstrong tweeted a link to meritocracy.com, something of a public petition for business leaders (including Armstrong) who want it known that they oppose diversity, equity, and inclusion (DEI) considerations when hiring staff.
Coinbase, Circle, and Ripple are also contributors to Fairshake, the largest of three pro-crypto political action committees (PAC) involved in the 2024 election cycle. Fairshake and its ilk have raised nearly $170 million to promote pro-crypto candidates and dethrone anti-crypto incumbents, with Coinbase and Ripple contributing a combined $100 million total.
While not all Fairshake contributors can be considered anti-Tether, the opacity of U.S. election financing means any of the firms involved could be discreetly funneling millions to any number of other ‘dark money’ groups, including those that support Consumers’ Research.
A farce for good
The U.S. isn’t the only region in which Tether keeps finding itself on its back foot. In Europe, the new Markets in Crypto Assets (MiCA) regulation is set to impose its initial stablecoin rules—including strict requirements for local banking of fiat reserves—at the end of this month.
OKX has already blocked European Economic Area customers from dealing in USDT, while other major exchanges like Binance and Kraken have indicated some uncertainty regarding when they might do likewise. This week, the New York-based Uphold exchange announced that it would kick Tether (and other impacted stables) to the curb as of June 27.
As Tetheredtocorruption.com indicates, Tether has been the subject of numerous profiles detailing USDT’s deep integration with organized crime. On June 19, the Washington Post ran an exclusive story on Chinese ‘pig butchering’/human trafficking/illegal gambling groups in Myanmar that the U.N. Office on Drugs and Crime said rely on USDT to move money via underground channels.
Tether has yet to issue a formal response to the Consumers’ Research campaign, although Ardoino did give an interview several days earlier in which he confessed that “we were naïvely thinking that we could just keep our head down, work, and if we were proving that we were doing good to the world and that we were useful, all the [fear, uncertainty, and doubt] would go away eventually, right?”
Right, it’s just that the people who have found USDT the most ‘useful’ are criminals and terrorists. USDT may be good for their operations but it’s a serious stretch to claim that Tether is “doing good to the world.”
Ardoino is an old hand at batting away criticism, so the Consumers’ Research campaign may not be anything all that new for him to deal with. But what he really should be concerned about now is not who might be saying what, but who might be listening.
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