Global financial services firm JPMorgan’s analysts, led by Nikolaos Panigirtzoglou, suggest that U.S. regulators can influence Tether, despite its non-U.S. status, through the Office of Foreign Assets Control (OFAC), as reported by Block.
The report highlights Tether’s link to Tornado Cash, an Ethereum privacy platform, which OFAC sanctioned in 2022 for alleged money laundering ties. Initially resistant, Tether froze stablecoins in OFAC-sanctioned wallets in December.
Tether CEO Paolo Ardoino remarked, “JPMorgan’s current concerns seem more related to the jealousy towards the evolution of financial and payment services, which they have been ignoring for a decade and now they’re upset because it got a lot of traction, If I were them, I would be more concerned about their $39 billion total fines.”
Analysts criticize Tether’s disclosures, lacking a detailed asset breakdown and independent audits. They also note S&P Global’s weak rating for Tether’s peg maintenance, citing price risks beyond U.S. T-bills.
The analysts predict regulatory challenges for Tether in the decentralized finance (DeFi) space, where it serves as collateral and liquidity.
Also Read: Tether Claps Back at JPMorgan’s Stablecoin Skepticism
