Tether’s $5B USDT Stablecoin Mint Sparks Regulatory Concerns

Tether’s latest stablecoin mint raises concerns about transparency and political ties. A MiCA-compliant Euro Stablecoin (EURØP) will launch soon.

The USDT Stablecoin Impact on the Crypto Market

Tether, the issuer of the USDT stablecoin, has once again become a focal point of discussion in the crypto industry after minting $5 billion in tokens within three days. This significant issuance coincided with a notable surge in the prices of cryptocurrencies.

Blockchain data revealed that Tether minted $1 billion USDT on November 6, coinciding with Bitcoin’s all-time high of $76,200. Two additional batches of $2 billion were issued on November 9 and 10, with Bitcoin pushing past the $80,000 mark.

This minting brought Tether’s market cap to $132 billion, reinforcing its dominance as the most utilized stablecoin. Market analysts noted that Tether’s expanding supply often correlates with heightened market activity, providing critical liquidity for centralized and decentralized platforms.

Tether’s Financial Ties Under Scrutiny

Howard Lutnick, CEO of Cantor Fitzgerald, has emerged as a critical player in Tether’s operations. A notable figure in former President Donald Trump’s administration, Lutnick has publicly defended the stablecoin’s reserves.

His assertions follow ongoing investigations by the US Attorney’s Office for the Southern District of New York into allegations of illicit activities linked to Tether, including potential terrorism financing.

Moreover, Cantor Fitzgerald’s 5% stake in the stablecoin issuer, valued at approximately $600 million, is also under scrutiny. Lutnick faces scrutiny because of his dual roles as a vocal advocate for Tether and a potential Secretary of Commerce nominee.

Critics argue that Lutnick’s involvement poses a conflict of interest. His long-standing criticisms of Federal Reserve policies contrast sharply with his silence on Tether’s opaque financial practices.

Some observers also question whether his political ties could shield Tether from regulatory actions.

Regulatory Impact

The recent minting spree has reignited concerns about Tether’s reserves and its influence on crypto market volatility. In 2021, the Commodities and Futures Trading Commission fined Tether $41 million for misrepresenting USDT’s reserves.

While periodic reports from auditing firm BDO Italia aim to bolster trust in Tether’s operations, critics like Justin Bons, founder of Cyber Capital, argue that more comprehensive disclosures are necessary. Bons has likened Tether’s financial practices to previous crypto firms with shady business operations, urging greater transparency.

Nevertheless, Tether remains focused on business. It recently invested $100 million in Adecoagro, acquiring a 9.8% stake in the Latin American agricultural giant.

The move prompted further calls for accountability in how stablecoin issuers operate in traditional financial markets.

MiCA-Compliant Euro Stablecoin EURØP Set to Launch

As the European Union prepares to fully enforce the Markets in Crypto-Assets Regulation (MiCA) by the end of the year, Schuman Financial has announced the imminent launch of its euro-backed stablecoin, EURØP. Schuman Financial, a financial management firm co-founded by Martin Bruncko and Eduardo Morrison (two former Binance executives), also unveiled its plans for EURØP.

The stablecoin is pegged 1:1 to the euro and will meet the MiCA compliance standards while catering to global users. According to the official announcement, it will go live within two weeks.

The EURØP Stablecoin €7M Seed Capital Raise

The launch follows a successful seed funding round in September, during which Schuman Financial raised €7 million ($7.36 million). Web3-focused venture capital firm RockawayX led the investment alongside investors such as Lightspeed Faction, Kraken Ventures, and Nexo Ventures.

EURØP will be utilized for digital payments, foreign exchange trading, and tokenized real-world assets. The stablecoin will initially operate on the Ethereum and Polygon blockchains before being available across leading centralized exchanges in Europe.

A Schuman Financial spokesperson stated that EURØP would be fully backed by cash and cash equivalents, ensuring transparency and stability. The company aims to build a regulated ecosystem by integrating with the Single Euro Payments Area (SEPA) and collaborating with global banking institutions, including Société Générale.

High-Risk Country Restrictions

While EURØP targets a global audience, Schuman Financial has restricted access to the stablecoin in 107 high-risk jurisdictions. Such jurisdictions include countries like Iran, North Korea, Venezuela, and Russia, as well as other vital markets such as Turkey, El Salvador, and South Africa.

The high-risk classification is based on guidelines from international organizations like the Financial Action Task Force and the European Union. Schuman Financial emphasized its commitment to adhering to these standards and ensuring this stablecoin aligns with regulatory requirements.

Regulatory Approval and Licensing

Meanwhile, Salvus SAS (a Schuman Financial subsidiary), achieved compliance with MiCA by acquiring a stablecoin issuer license in France. The French Prudential Supervision and Resolution Authority granted Salvus SAS the legal right to issue electronic money tokens in the European market.

This regulatory framework strengthens EURØP’s market entry, enabling it to operate within legal guidelines while providing secure and compliant transactions.