The World’s Largest Stablecoin Under Scrutiny | Global News Avenue

It’s an interesting time for Tether. The world’s most traded cryptocurrency has also become the preferred choice for international criminals and others looking to conduct cross-border transactions outside of the world’s mainstream financial system.

As a result, Tether is attracting scrutiny from U.S. and EU law enforcement agencies. Meanwhile, Tether has secured support from Wall Street titan Cantor Fitzgerald and its CEO, Howard Lutnick, Donald Trump’s nominee for commerce secretary The huge investment has raised questions about potential conflicts of interest.

What is Tether and how does it work?

Tether was founded in 2014 by Giancarlo Devasini, an Italian former plastic surgeon who helped develop cryptocurrency exchange Bitfinex, and American Brock Pierce. Co-founder of Realcoin and linked to former White House adviser Steve Bannon Donald Trump.

tether Revolutionizing Cryptocurrency Trading By providing a stable digital asset whose value is pegged to the U.S. dollar. this peg to dollar by maintaining Reserves include U.S. Treasury Bills, Gold, Bitcoin, and various other assets.

Tether is currently the world’s most traded cryptocurrency, and its market capitalization has grown from just a few billion dollars in 2019 to $138 billion in January 2025.

Why some criminals love Tether

Despite its apparently legal use, Tether has come under increasing regulatory scrutiny because it could also allow bad actors to secretly move funds. According to a January 2024 United Nations report, USDT has become the “go-to” for criminal groups, allegedly facilitating approximately $17 billion in illegal transactions.

The stablecoin’s appeal to criminals stems from its liquidity, relative anonymity and the ease with which large sums of money can be moved across borders without traditional banking oversight. Drug cartels, sanctioned entities, and even terrorist groups have reportedly used USDT to evade financial controls.

Howard Lutnick’s Tether stake and its political implications

Cantor Fitzgerald’s 5% stake in Tether, worth about $600 million, has attracted attention from the financial and political circles. Lutnick has become a powerful ally. His firm currently manages the bulk of Tether’s purported billions of dollars in treasury securities, earning significant fees in the process.

Lutnick serves as co-chairman of the Trump transition team and would serve as commerce secretary if confirmed, raising concerns about potential conflicts of interest, especially in light of investigations into the use of Tether by bad actors.

The Moral Hazard of Tether’s Growth

Tether is primarily used for legal applications, such as facilitating cryptocurrency and token trading, providing liquidity, and providing a stable digital store of value. This activity has driven Tether’s rapid adoption in global markets and its integration into mainstream financial channels.

As a result, some experts warn that Tether’s continued expansion could pose significant risks. Some academics believe Tether has become “too big to fail” in the crypto ecosystem and its collapse could trigger contagion beyond digital assets.

Tether’s resistance to a full audit, combined with the company’s growing influence in various sectors including investments in artificial intelligence and video platforms, raises further questions about prudent financial management, systemic risk and regulatory oversight.

bottom line

Tether’s upward trajectory illustrates the promise and perils of cryptocurrency innovation. While it has become an integral part of digital asset infrastructure, its growing size, regulatory challenges, and potential political entanglements have created a complex web of risks and concerns, highlighting the growing relationship between traditional finance, cryptocurrencies, and political power. Blurred lines.