Tether, the issuer of the USDT (USDT) stablecoin, has scaled back a planned multibillion-dollar equity raise after investors pushed back on a proposed valuation of roughly $500 billion.
What Happened: Capital Raise Shrinks
The company had been exploring a sale of up to $15-20 billion in shares, largely from existing insiders, according to the Financial Times.
Advisers now suggest the raise could be closer to $5 billion, or may not proceed at all.
CEO Paolo Ardoino said the larger figure represented a maximum they were prepared to sell. He added the company would be "very happy" even if no shares changed hands.
Tether reportedly generated about $10 billion in profit last year. The company still relies on quarterly attestations from BDO Italia rather than a full audit.
S&P has classified its reserves at the weakest rating tier. The company carries rising exposure to Bitcoin (BTC) and gold, secured loans exceeding $17 billion, and equity of about $6.4 billion.
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Why It Matters: Trust Questions Linger
The gap between Tether's massive profitability and investor hesitance reflects ongoing concerns over transparency, asset quality, and regulatory exposure.
For crypto users who rely on USDT liquidity daily, the key signals remain future reserve disclosures, any shift from attestations to independent audits, and regulatory developments around global stablecoin rules. Stricter requirements on disclosure, capital, or asset segregation could either validate Tether's model or force significant changes.
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