Tether Could Be Delisted If U.S. Law Requires Reserves

Armstrong’s comments underscore the growing tension between regulatory bodies and the cryptocurrency industry, as they work to establish clear guidelines for digital assets.

The possibility of a delisting stems from the ongoing scrutiny of Tether’s financial practices. According to the Wall Street Journal, Tether is currently under investigation by both the Justice Department and the Treasury Department. The investigations are focused on whether Tether’s reserves are fully backed and properly audited. For years, Tether has faced criticism for not providing fully verified financial records, which has led to concerns over its ability to maintain the value of USDT, which is pegged to the U.S. dollar.

JUST IN: US Government launches investigation into $USDT crypto firm Tether!

Ripple CEO Brad Garlinghouse Issued a Black-swan Warning 5 months ago about Tether, The Largest Stablecoin Issuer On The Planet!

“The US Government Is Going After Tether. That Is Clear To Me.” -… pic.twitter.com/1TU8xDZner

— Good Morning Crypto (@AbsGMCrypto) October 25, 2024

If the new U.S. regulations come into effect, stablecoin issuers like Tether will likely be required to hold their reserves in U.S. Treasury bonds, ensuring that every USDT in circulation is fully backed by a reliable and transparent asset.

Coinbase may Delist Tether if Transparency Issues Persist

Armstrong emphasized that Coinbase would comply with any legal mandates from the U.S. government. Tether’s popularity may be at risk due to its lack of transparency amid increasing regulatory pressure. Coinbase’s potential delisting of Tether would be a blow to the stablecoin’s popularity. Nowadays, it is widely used by crypto traders and investors as a haven during periods of market volatility.

JUST IN: Coinbase CEO Armstrong says the exchange would delist Tether if required by law, as US legislation may mandate full reserves in US Treasury bonds.

According to the Wall Street Journal, Tether is under investigation by the Justice and Treasury Departments for lacking… pic.twitter.com/cnk8VgKSl7

— Cointelegraph (@Cointelegraph) January 21, 2025

Experts believe a more transparent, fully backed stablecoin system could benefit the crypto market long-term. It provides more confidence for institutional investors and improves the overall reputation of digital assets. However, Tether’s supporters contend that the coin has managed to maintain its peg to the dollar despite lacking full audits, citing the success of the coin’s widespread use.

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