Tether Accused of Using Borrowed Money to Back USDT

BTCC / BTCC Square / Global Cryptocurrency /

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2025-05-09 10:56:02

Tether, the world’s largest stablecoin, faces allegations of insufficient backing by real US dollars. A viral X post by crypto analyst Deso suggests the stablecoin may rely on borrowed funds, creating a Ponzi-like structure that could destabilize the crypto market if demand falters.

The alleged scheme involves firms leveraging borrowed money to purchase USDT, converting it into cryptocurrencies like Bitcoin, and cashing out for dollars—repeating the cycle to artificially sustain liquidity. Market participants now question whether Tether’s $1 peg can withstand pressure if this mechanism unravels.

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