Former SEC Official Allegations Tether Running Ponzi Scheme

Former Securities and Exchange Commission (SEC) enforcement officer John Reed, who worked for the SEC for almost two decades, has questioned the significance of USDT stablecoin supplier Tether’s claimed lack of transparency.

The former SEC official made the statements in response to a CNBC interview in which Tether co-founder Reeve Collins was challenged to explain the company’s lack of complete disclosure, particularly in light of the collapse of the FTX. Reed speculated that the firm was operating a Ponzi scheme based on Collins’ statement.

Despite the trust concerns, Collins refuted the suggestion that the corporation is hiding something about its reserves, arguing that Tether’s stablecoin has endured the test of time by being pegged to the US dollar.

Tether’s inability to publish essential information regarding its financial sheet, according to Reed, might be a hint that the company is operating as a “house of cards,” Reed wrote in the tweet.

Following the demise of FTX, Reed has been critical of the exchange’s administration, with creator Sam Bankman-Fried facing criticism for suspected misuse of user cash.

As updated in an earlier Coincu News article, on August 31, Roche Freedman, a lawyer involved in several scandals with Ava Labs, filed to withdraw from ambitious class-action lawsuits involving Tether, Bitfinex , Tron Foundation and BitMex.

The reason for this withdrawal comes from the whistleblower website Crypto Leaks which published a series of damning videos, accusing the lawyers of weaponizing class-action lawsuits to collect sensitive information about cryptocurrency companies.

The site also alleges Roche’s lawsuits intentionally attacked competitors of blockchain project Avalanche, from which Roche is said to have received tokens and has previously represented in legal matters.

Though both Roche and Avalanche founder Emin Gün Sirer have denied those allegations. However, the act of withdrawing from the lawsuits of this lawyer further increases the authenticity of the whistleblower website.

Tether and Bitfinex, displeased with Roche Freedman’s withdrawal, have filed a request for Roche’s entire law firm to withdraw from the lawsuit and destroy any documents collected during the discovery phase of the case.

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Harold

Coincu News