Tether, the issuer of the USDT stablecoin, has recently been involved in several notable developments:
Investment in Rumble
On December 20, 2024, Tether announced a $775 million strategic investment in Rumble, a video-sharing platform and cloud services provider. This investment aims to bolster decentralized and community-owned media platforms. Following the announcement, Rumble's shares surged by approximately 43.7% in after-hours trading. Rumble plans to allocate $250 million of this investment toward growth initiatives and the remaining $525 million for a self-tender offer to repurchase up to 70 million shares of its common stock. The deal is expected to close by the first quarter of 2025.
Regulatory Scrutiny in Europe
Tether's USDT may face challenges in Europe due to the Markets in Crypto-Assets (MiCA) regulations. The compliance deadline is December 30, 2024, and there is uncertainty regarding USDT's adherence to these new rules. Non-compliance could lead to the removal of USDT from European exchanges.
Involvement in Illicit Activities
Reports have highlighted that Tether's USDT has been used in illicit transactions. A report by TRM Labs indicated that in 2023, USDT was the most utilized stablecoin for criminal activities, being connected to $19.3 billion in illicit transactions. Additionally, authorities have targeted money-laundering networks involving Russian elites who used cryptocurrencies, notably USDT, to evade international sanctions. Tether Holdings has denied involvement with criminal activities and stated that it cooperates with law enforcement.
Financial Performance
In the first quarter of 2024, Tether reported a profit of $4.52 billion, with U.S. Treasury securities being a major contributor. The company also holds significant positions in gold and Bitcoin. In August 2024, Tether reported that their profit during the first half of the year was $5.2 billion, with a net operating profit of $1.3 billion during the second quarter alone. Tether also reported that it holds more than $97.6 billion in U.S. Treasuries, making them one of the largest buyers of Treasury bills in the world, more than many countries.
Strategic Investments
Tether has diversified its investment portfolio, including a $200 million investment in Blackrock Neurotech, a U.S.-based brain-chip company, and a $100 million stake in Bitdeer, a Bitcoin mining firm. These investments reflect Tether's broader strategy to engage in emerging technologies and the cryptocurrency mining sector.
These developments underscore Tether's active role in the cryptocurrency ecosystem, its strategic investments in technology and media platforms, and the regulatory challenges it faces, particularly in Europe.
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