JPMorgan Warns of Increased Risk for Crypto Market Due to Tethers Lack of Regulatory Compliance and Transparency
JPMorgan has warned of increased risk for the crypto market resulting from Tethers lack of regulatory compliance and transparency. The global investment banks analysts explained that other stablecoin issuers that have been more compliant with existing regulations are likely to benefit from the coming regulatory crackdown on stablecoins and gain market share.
JPMorgan Warns About Tether and Crypto Market Risks
Global investment bank JPMorgan released a report on Thursday cautioning that the rapid expansion of Tethers USDT stablecoin is a risk for the crypto market overall. USDT is the worlds largest stablecoin, with a market capitalization exceeding $96 billion at the time of writing.
JPMorgans analysts explained that Tethers lack of regulatory compliance and transparency is an increasing risk for the overall crypto market. Noting that Tether falls short of competitor Circle, the issuer of USDC, when it comes to regulatory compliance for their stablecoins, the analysts wrote:
Stablecoins issuers that have been more aligned with existing regulations are likely to benefit from the coming regulatory crackdown on stablecoins and gain market share.
Responding to JPMorgans criticism of USDT and the risks to the crypto market, Tether CEO Paolo Ardoino stated:
Tethers market domination may be a negative for competitors including those in the banking industry wishing for similar success but its never been a negative for the markets that need us the most.
Weve always worked closely with global regulators to educate them on the technology and provide guidance on how they must think about it, the executive added.
Tether faced a $41 million fine from the U.S. Commodity Futures Trading Commission (CFTC) in 2021 for misrepresenting its reserves, specifically claiming that USDT was fully backed by U.S. dollars. Following the fine, the crypto firm has strived to improve transparency by issuing quarterly attestations of its operations and finances. Tether reported a profit of $6.2 billion for 2023.
What do you think about JPMorgan analysts warning regarding Tether, USDT, and the risks to the overall crypto market? Let us know in the comments section below.
Source: Bitcoin.com
The post JPMorgan Warns of Increased Risk for Crypto Market Due to Tethers Lack of Regulatory Compliance and Transparency appeared first on Crypto Breaking News.
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