1. Event Overview
Starting December 30, $USDT will be delisted from all EU exchanges. This news has sparked widespread attention and controversy in the market, with concerns that Tether's stablecoin may collapse, plummeting to $0 like $UST did in 2022. Will we see a repeat of the 70% market crash caused by the FTX collapse? Here’s an analysis of Tether's past and future.
2. Current Market FUD Overview
Recently, $USDT has faced significant fear, uncertainty, and doubt (FUD). This time is different, with more specific reasons behind it:
- The upcoming MiCA crypto regulatory framework in the EU means Tether cannot obtain the necessary licenses to operate in the EU market.
- This directly led to all EU exchanges having to delist $USDT.
3. Long-term Controversies over Tether's Security
Questions regarding Tether's security have been longstanding:
- Audit Issues: Tether committed to audits starting in 2015, but it wasn't until 2021 that it partnered with BDO to release an 'audit report', which still wasn't a formal audit.
- Fines and Reserve Issues: In 2021, the U.S. Commodity Futures Trading Commission (CFTC) fined Tether over mismanagement of $850 million in funds. It was later found that its reserves contained commercial paper with unclear sources, quality, and liquidity.
4. Impact and Response to EU New Regulations
- New Regulation Impact: The MiCA regulations require stablecoin issuers to obtain licenses to operate, but Tether has not passed the relevant approvals.
- Response Measures: Tether has invested in the fully compliant StablR project to bypass regulations and continue operating in the EU. This strategy may provide Tether with a breathing space but has not alleviated market concerns.
5. Is Tether 'too big to fail'?
Despite numerous controversies and risks, Tether has become an indispensable part of the entire crypto industry:
- Tier-1 exchanges' main reserve funds are still $USDT.
- Should Tether collapse, the entire industry could fall into a systemic crisis. Thus, Tether's downfall poses a threat not only to itself but to the entire crypto industry.
6. Market Response Recommendations
The current market is turbulent, and investors are advised to take the following measures:
- Short-term Strategy: Temporarily convert $USDT to more stable alternatives (such as $USDC) to reduce potential risks.
- Long-term Observation: Although Tether seems 'too big to fail,' the uncertainty of regulatory policies and its long-term viability still need attention.
Conclusion:
$USDT's delisting from EU exchanges marks a significant challenge for Tether. However, given its position in the industry and response strategies, Tether is likely to navigate this crisis once again. During this turbulence, investors need to calmly assess risks and flexibly adjust strategies to protect asset safety.
