Tether announced that, from December 2023, Chief Technology Officer Paolo Ardoino will assume the position of CEO from the current leader, Jean-Louis van der Velde. Van der Velde will remain CEO of the crypto exchange Bitfinex, which is linked to Tether, while assuming a new advisory role at Tether. With the USDT token accounting for an overall market capitalization of $80 billion, Tether is among the most influential stablecoin operations globally.
Paolo Ardoino, Tether's chief technology officer, has been appointed as the stablecoin company's new CEO, succeeding Jean-Louis van der Velde, a crypto executive and entrepreneur who has held the role of CEO since Tether's inception. Ardoino will take up the position on December 2023, and will continue to serve as the chief technology officer while also performing his new duties as CEO. Additionally, he will also continue his role as the Chief Strategy Officer of Holepunch, a peer-to-peer communications network founded by Tether, Bitfinex, and Hypercore. Since joining Bitfinex in 2014, Ardoino's involvement in crypto has been considerable.Tether is one of the world's largest stablecoin operations, with its USDT token having a market value of more than $80 billion and maintaining a one-to-one peg to the U.S. dollar. Stablecoins are an important part of the crypto market and allow traders to move in and out of digital tokens quickly and effortlessly, regardless of their location.Tether's van der Velde said Ardoino is "perfectly suited" to lead Tether, and that he believes the company will keep growing with focus on emerging markets and technology. Even though van der Velde's low-profile approach has raised transparency concerns among market observers, he will remain in an advisory role at Tether while also keeping his post as CEO of Bitfinex.
For several years Ardoino has been the face of Tether, appearing on podcasts and conducting multiple media interviews to protect his business and its USDT token from criticism. In a meeting with CNBC at the Money 20/20 gathering in Amsterdam earlier this year, Ardoino said the firm would "eventually" release a full audit. Adding to it, he shared that the reason for the delay was the lack of oversight in the industry by the big four auditing firms. Although crypto regulations are emerging throughout the world, there is still no global framework for the sector as of yet. This is expected to change soon with the EU's MiCA regulation, which would necessitate that stablecoins have a certain amount of quality assets and disclose their reserves openly. Van der Velde, in contrast, has mostly been out of the limelight while managing Tether without much interaction with the media. Last year Tether was affected by a dramatic drop in the price of its rival stablecoin, UST. This happened after traders abruptly sold their holdings out of fear for its backing, leading to UST's price dropping to zero.
Shortly thereafter, USDT began to move away from its fixed exchange rate versus the U.S. dollar, leading to doubts as to whether it was truly effectively backed by the greenback. Consequently, people sought out Tether to make their operations more open and they had to carry out a full-scale audit of the currencies they held in reserve. Tether maintained that its coin was always backed by U.S. dollars and other assets like government bonds, cryptocurrencies such as Bitcoin, and even gold. In the three months between April and June, Tether's reserves grew to more than $86 billion and during this period, the company earned a total profit of more than $1 billion, representing an rise of 30% from the earlier quarter. Tether is currently invested in T-Bills, the returns from which amount to around 4.6%. The company profits from charges, loaning to other establishments, and investing in digital tokens and rare metals. In 2021, the firm reached an agreement with the New York Attorney General's office for which it paid a penalty of $18 million as a consequence of claims regarding Bitfinex and Tether having shifted hundreds of millions of dollars to camouflage the alleged disappearance of $850 million of pooled client and corporate funds. As part of the arrangement, Tether is required to reveal quarterly reports on its reserves. Despite this, the company keeps contending with snappy supervision from the United States Department of Justice with Bloomberg stating the agency is probing certain executives at Tether over allegations of bank fraud at the start of their term. - CNBC's Arjun Kharpal contributed to this reportWATCH: How a $60 billion crypto collapse got regulators worried
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