A picture taken in London shows gold-plated souvenir cryptocurrency tether, bitcoin, and ethereum coins arranged beside a screen displaying a trading chart, May 8, 2022.
Justin Tallis | Afp | Getty Images
Paolo Ardoino, the chief technology officer for Tether, has been promoted to CEO of the stablecoin company in a surprising move. This unexpected development aims to enhance Tether’s position in the market. Ardoino will assume leadership from Jean-Louis van der Velde, a mysterious crypto executive who has long been at the helm of the company.
An official press release from Tether announced Ardoino’s appointment, stating that he will assume the position of CEO from December 2023, succeeding van der Velde. While still serving as Bitfinex’s CEO, van der Velde will transition to an advisory role within Tether, cementing the close relationship between the two entities.
Ardoino’s responsibilities will expand to include both CEO and chief technology officer for Tether. Additionally, he will continue to serve as the chief strategy officer of Holepunch, a peer-to-peer communications network launched by Tether, Bitfinex, and Hypercore.
Ardoino entered the crypto industry in 2014 when he joined Bitfinex. He later joined Tether as its chief technology officer in 2017, solidifying his expertise in the stablecoin sector.
Tether is recognized as one of the world’s leading stablecoin operations. Its USDT token, designed to maintain a 1:1 peg to the U.S. dollar, holds the highest market value of any stablecoin, with over $80 billion worth of tokens currently in circulation. Stablecoins play a crucial role in facilitating trading activities across digital tokens worldwide.
Van der Velde expressed his confidence in Ardoino’s leadership skills, stating, “Ardoino is exceptionally well-suited to lead Tether. I believe Tether will continue its rapid growth, with a focus on emerging markets and transformative technology.”
Van der Velde’s departure as CEO, a figure who rarely made public appearances, coincides with increased scrutiny over Tether’s transparency. Critics often cite the former CEO’s lack of public engagement as evidence of Tether’s opaque practices.
Ardoino has played a critical role as the public face of Tether, regularly engaging with the media and participating in interviews and podcasts to defend the company and its USDT token against scrutiny.
In a recent CNBC interview, Ardoino addressed the need for a full audit of Tether, stating that the company is actively working towards it. However, he cited the lack of regulatory framework and the unwillingness of major auditing firms to work in the crypto industry as reasons for the delay.
Regulation in the crypto industry is evolving, with the upcoming EU’s Markets in Crypto Assets (MiCA) regulation set to introduce stricter requirements for stablecoins, including mandatory asset disclosures. Nevertheless, MiCA won’t be fully implemented until December 2024.
In contrast, van der Velde operated largely behind the scenes, leading Tether without public visibility or engagement with the press.
Tether faced controversy when a competitor stablecoin, TerraUSD (UST), collapsed, leading to concerns about the stability of Tether’s USDT and its backing. Tether firmly maintains that its coin is always backed by dollars, government bonds, and other assets, including cryptocurrencies and precious metals.
Tether’s reserves have grown to over $86 billion, and the company reported a profit of over $1 billion in the last quarter. Tether generates revenue through various means, including fees, loans to institutions, and investments in digital tokens and precious metals.
The company settled with the New York Attorney General’s office in 2021, paying $18 million to resolve allegations of funds mismanagement. As part of the settlement, Tether agreed to provide quarterly reports disclosing its reserves.
Tether is currently under scrutiny from the U.S. Department of Justice, which is investigating allegations of bank fraud by Tether executives during the early stages of the company’s operations.
– CNBC’s Arjun Kharpal contributed to this report
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Last year, Tether faced further controversy when its USDT deviated from its U.S. dollar peg, sparking concerns about the full backing of the stablecoin. Calls for increased transparency and an audit of USDT’s reserves grew louder.
Tether maintains that its reserves are backed by dollars, dollar-equivalent assets, and a range of other assets, including cryptocurrencies and gold.
Tether’s extensive reserves surpassed $86 billion in the April to June quarter, with a reported profit increase of 30% quarter-over-quarter. The company invests in U.S. Treasury bills, leveraging various revenue streams to generate income.
The company reached a settlement of $18 million with the New York Attorney General’s office, resolving allegations related to fund movements and mismanagement. As part of the settlement, Tether committed to regular quarterly reports detailing its reserves.
Tether’s regulatory compliance is under scrutiny, as the U.S. Department of Justice investigates allegations of bank fraud involving Tether executives during the early stages of the company’s operations.
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