In the cryptocurrency market, Tether (USDT) has once again come under scrutiny. A viral post on social media platform X, by analyst Deso, raised concerns about Tether possibly not being fully backed by US dollars. According to Deso, USDT reserves might be underpinned by borrowed funds and risky financial cycles instead of actual cash. These claims carry the potential to create significant security vulnerabilities within the cryptocurrency market.
Ongoing Doubts About Tether’s Reserve Security
Tether operates as the issuer of the USDT stablecoin, pegged 1:1 to the US dollar, making it a crucial element of the cryptocurrency ecosystem with a market value of approximately 150 billion dollars. Deso’s analysis, however, suggests the presence of a debt-based structure behind circulating USDT. This implies that the fundamental trust mechanism crucial to cryptocurrency investors might be at risk.
The analyst identifies major trading companies like Abraxas, Cumberland, and Wintermute as central to this cycle. These companies allegedly purchase USDT with borrowed capital, convert it to assets like Bitcoin (BTC) 
$93,773, liquidate them, and repeat the cycle. This leaves the system vulnerable to collapse if prices fall or demand diminishes, leading to unpayable debts.
El Salvador’s Move Raises Fresh Concerns
Another highlight from Deso includes Tether’s decision to relocate its headquarters to El Salvador. The lack of an extradition agreement with the US could pose challenges in potential investigations. This shift has fueled speculation about a “planned move,” further heightening transparency concerns surrounding the largest stablecoin issuer.
Moreover, Deso claims that control over the 150 billion USDT supply rests solely with Giancarlo Devasini, one of Tether’s founders. Blockchain tracking tools like Arkham Intelligence reveal that Devasini manages a massive reserve.
