A photo taken in London shows gold-plated souvenir cryptocurrency coins, bitcoin and ethereum arranged next to a screen displaying a trading chart, on May 8, 2022.
Justin Tallis | afp | fake images
Paolo Ardoino, Tether's chief technology officer, has been promoted to CEO of the stablecoin company, in a surprise move. Ardoino will take the reins from Jean-Louis van der Velde, a secretive crypto executive and entrepreneur, who has been the company's boss for years.
In a press release on Friday, Tether said Ardoino will lead Tether starting in December 2023, succeeding van der Velde. Van der Velde will take on a new advisory role at Tether while also continuing to serve as CEO at Bitfinex, a crypto exchange that is closely associated with Tether and operated by the same Hong Kong-based parent company, Ifinex.
Ardoino will continue to serve as Tether's chief technology officer while taking on his additional duties as CEO, Tether said. He will also continue to serve as chief strategy officer of Holepunch, a peer-to-peer communications network launched by Tether, Bitfinex and infrastructure platform Hypercore.
Ardoino first became involved in cryptocurrencies when he joined Bitfinex in 2014. He joined Tether as CTO in 2017.
Tether is one of the largest stablecoin operations in the world. Its USDT token, which aims to maintain a one-to-one link with the American dollar, is the largest stablecoin by market value with over $80 billion in tokens currently in circulation. Stablecoins are a vital part of the cryptocurrency market that helps traders enter and exit digital tokens, anywhere in the world, 24 hours a day.
In a statement, Tether's van der Velde said Ardoino is "extremely well prepared to lead Tether," adding: "I believe Tether is poised to continue its rapid growth, with a continued focus on emerging markets and transformative technology." .
The departure of van der Velde, an executive who has rarely appeared in public, comes as Tether faces scrutiny over its transparency. Many market observers had pointed to the former CEO's lack of public attitude as a sign that Tether is not transparent.
Ardoino has been the face of Tether for years. He has conducted multiple media interviews and appeared on podcasts, often to defend his company and its associated USDT token from scrutiny.
In a CNBC interview at the Money 20/20 Europe conference in Amsterdam earlier this year, Ardoino said the company would release a full audit "eventually."
"We are working on it," he added.
Explaining why the company had not yet completed a full audit, Ardoino said this was because none of the big four audit firms were willing to work with an industry that lacks regulation. While regulations for cryptocurrencies are being implemented around the world, there is still no comprehensive framework for the industry.
This will soon change with the EU Crypto Asset Markets (MiCA) regulation just around the corner. This would require stablecoins to hold a certain level of assets, including more quality assets in their reserves, as well as publicly disclose their reserves. However, MiCA will not be fully implemented until December 2024.
Van der Velde, on the other hand, has largely operated in the shadows, running Tether without appearing much in public or speaking to the press.
Tether faced major controversy last year following the collapse of a rival stablecoin called TerraUSD or UST. The price of UST fell to zero after cryptocurrency investors left the coin en masse due to fears over its support.
Shortly after, Tether's USDT also began to deviate from its peg to the US dollar, fueling concerns about whether it was truly fully backed by dollars. That led to calls for Tether to increase transparency and conduct a full audit of the reserves behind USDT.
For its part, Tether said its currency is always backed by dollars and dollar-equivalent assets, including government bonds. Tether is also backed by other assets, including crypto tokens like bitcoin and even gold.
Tether reserves rose to more than $86 billion in the three-month period from April to June. During that quarter, the company also says it made a profit of more than $1 billion, a 30% quarter-over-quarter increase.
The company has a reserve of US Treasury bills, which currently yield about 4.6%. Tether makes money from various fees, issuing loans to other institutions, and investing in digital tokens and precious metals.
In 2021, Tether settled with the New York Attorney General's office for $18 million over allegations that it and its sister company, Bitfinex, had moved hundreds of millions of dollars to cover the apparent loss of $850 million. dollars of corporate and client funds mixed.
As part of the deal, Tether agreed to offer frequent quarterly reports detailing its reserves.
Tether continues to face intense regulatory scrutiny. According to Bloomberg, the US Department of Justice is investigating Tether executives over allegations that they committed bank fraud in the early days of the company's management.
- CNBC's Arjun Kharpal contributed to this report.
