- Tether’s alleged lack of audits, delistings on EU exchanges, and the minting of new tokens are the primary reasons
- Its Q1 2025 report claims $115 billion in Treasuries plus $5.6 billion in excess reserves, but no certified auditor has verified this line-by-line
- Tether refused to comply with MiCA, so Binance, Kraken, and other exchanges delisted USDT in Europe
A recent social media post from Chain Mind raises concerns that USDT (Tether) could follow UST to $0, pointing to Tether’s alleged lack of audits, delistings on EU exchanges, and the minting of new tokens. The post is also accompanied by the image depicting a hypothetical crash of Tether from $1 to near $0, drawing parallels to the 2022 TerraUSD (UST) collapse, where UST lost its $1 peg due to insufficient reserves.
The core concerns
Several reasons were mentioned on why this might happen. For starters, Tether frequently mints large batches of USDT (marked authorized but not issued), which are effectively ready for circulation but not yet in the market. Just this month, Tether minted $2 billion in new USDT on TRON.
While the platform says this is routine inventory management, skeptics see it as possible preparation for redemption waves, when many investors quickly pull their money out of a fund, causing a large outflow.
Then, according to Chain Mind, the absence of real audits is another red flag, considering that Tether claims it’s fully backed but regulators disagreed in the past. For instance, in 2021, the New York Attorney General (NYAG) concluded that Tether misrepresented its reserves. As a result, the platform had to pay $18.5 million in penalties and agreed to periodic attestations, but there were no independent forensic audits.
Tether’s Q1 2025 report claims $115 billion in Treasuries plus $5.6 billion in excess reserves, but no certified auditor has verified this line-by-line.
Next is the MiCA (Markets in Crypto-Assets Regulation) regulation in Europe, which requires stablecoins to hold 60% of reserves in EU-regulated banks. Tether refused to do this, so Binance, Kraken, and other exchanges started delisting USDT in Europe.
USDT is the biggest stablecoin
Tether remains the stablecoin with the largest market share, holding 62% of all stablecoin volume. It’s also the dominant settlement layer on most CEXs and DeFi protocols.
Still, the analysis states that Tether won’t collapse, at least not today (if it ever does) and that the main triggers for that to take place would be legal action forcing reserve freezes, loss of banking partners, proof that reserves are partly unbacked, and social contagion.
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