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Tether's Paolo Ardoino: 'If the U.S. Government Wanted to Kill Us, They Can Press a Button'

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coindesk
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1 year ago
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LUGANO, SWITZERLAND – As crypto colossus Tether comes under renewed scrutiny, CEO Paolo Ardoino told CoinDesk that the company respects international sanctions and works closely with law enforcement, but acknowledged it is ultimately at the mercy of U.S. authorities.


"If the U.S. wanted to kill us, they can press a button and kill us anywhere," Ardoino said. "We are not going to fight the U.S."


"We may not be the best in presenting ourselves, but what matters is that we onboarded the FBI" to Tether's compliance systems, he added. "We onboarded the U.S. Secret Service. We have thank-you letters from the DOJ … We think we are doing, you know, the best we can."


CoinDesk interviewed Ardoino at the Plan B conference on Friday hours before The Wall Street Journal published an article alleging that the U.S. Department of Justice (DOJ) is conducting a criminal investigation of Tether for possible violations of sanctions and anti-money-laundering laws. Bitcoin (BTC) and other cryptos dipped on the report.


Ardoino later posted on X he had seen "no indication that Tether is under investigation," and Tether called the Journal story "wildly irresponsible."


Also last week, Politico reported on potential conflicting interests of key Tether ally Howard Lutnick, CEO of Wall Street bond-trading powerhouse Cantor Fitzgerald, which custodies most of Tether's $80 billion U.S. Treasury bill holdings. Lutnick also serves as the head of Republican presidential candidate Donald Trump's transition team.


Tether coming into the crosshairs of U.S. authorities could reverberate across the $2 trillion global digital asset market. The company is a crucial player in the crypto ecosystem; its $120 billion market cap (USDT) by far the industry's largest stablecoin, serves as the main form of liquidity on trading venues, and is increasingly used as a payment vehicle in emerging countries.


When asked about the possibility of U.S. authorities holding leverage over Tether through its reserve assets held with the U.S.-based Cantor, Ardoino said that the company "cannot hide."


"Wherever you hold T-bills, the T-bills are actually ultimately in the Fed account." he said, referring to the Federal Reserve system.


"The reason why I'm comfortable to be with Cantor is that we respect OFAC." The Office of Foreign Assets Control is an office in the U.S. Treasury Department tasked with enforcing sanctions against countries and individuals, including terrorists and narcotics traffickers.


Asked about USDT's role in illicit finance, Ardoino replied that it's "a drop in the ocean" compared to what the U.S. dollar used for.


"No one is perfect, but look at the fines that the banks paid for helping drug lords," he said. For example, TD Bank this month agreed to pay over $3 billion in fines for failing to properly monitor money laundering by drug cartels.


Ardoino said that Tether has been proactive in freezing and blacklisting crypto wallets and the company works with 180 government agencies around the world.


"The message that we're giving is very loud and clear: You have to be a very, very, very stupid criminal if you want to use USDT or crypto in general," he said.


Speaking about the upcoming U.S. election's potential ramifications for digital asset regulations and for Tether, Ardoino said that he's hopeful that whoever wins will understand the potential of crypto and stablecoins.


"When it comes to stablecoins, I think it's easier for them to see it," he said. "The Chinese are selling T-bills and we are buying them now. I think the U.S. government and regulators came to the conclusion that, 'oh yeah, that's a great thing.'"


Tether's U.S Treasury holdings rank the company among top 20 countries, topping even those of Germany.


Asked about Cantor Fitzgerald and Howard Lutnick's political role, Ardoino said working with him was part of Tether's four-year journey from a $10 billion issuer using small banks to a large operation that needs an "Ivy League custodian" for its T-bill holdings.


"What made the difference was Howard [Lutnick] publicly affirming that his firm had done due diligence on Tether and telling everyone 'we have their money,'" he said.


"We don't expect any political favors by anyone," Ardoino said. He said that Tether has made significant efforts to advance financial inclusion, and "Democrats should understand the need for financial inclusion better than anyone else."


Meanwhile, the company is a big buyer of U.S. debt, which should be compelling to Republicans interested in preserving the U.S. dollar's hegemony.


"What we're building makes sense for both parties," he concluded. "I think that either way, [U.S. regulations] will turn out to be a positive thing."


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