As the relationship between banks and crypto businesses continues to evolve, we see major players in the industry taking strategic steps to adapt to the ever-changing landscape. Recently, Tether withdrew over $4.5 billion from banks in Q1 to reduce counterparty risk in response to the ongoing banking crisis. Meanwhile, Ripple achieved a significant victory against the United States Securities and Exchange Commission (SEC) when a U.S. judge denied the SEC’s motion to seal certain records, which Ripple views as key evidence in its legal dispute.
Tether, the stablecoin operator, made headlines following its latest audit report which showed a “substantial reduction” in counterparty risk after pulling out $4.5 billion from banks. The company has had its share of controversies, including an $18.5 million fine imposed by the New York Attorney General’s Office for misrepresenting the fiat backing for its reserves in 2021. However, Tether’s recent financial moves have reinforced its USDT stablecoin. The market capitalization of USDT increased from $66 billion to over $82 billion during Q1, while its U.S. Treasury bills reached a new high of over $53 billion, or 64% of its reserves. Combined with other assets, USDT is now backed by 85% cash, cash equivalents, and short-term deposits.
On the other hand, Ripple’s ongoing battle with the SEC took a favorable turn when a judge denied the regulator’s motion to seal records of internal deliberations. Ripple has been facing allegations that sales of its XRP token violated U.S. securities laws and has spent over $200 million in legal fees defending itself. The recent decision is seen as a win for transparency and could potentially add weight to Ripple’s argument.
In other news, Ledger received mixed reactions for its new recovery service, Ledger Recover, designed to retrieve lost seed phrases for hardware crypto wallets. The service has raised concerns among the crypto community and security specialists, who argue that the technique used—dividing the seed phrase into three encrypted fragments and sending them to different external entities—may create a backdoor for hackers. Critics point to Ledger’s 2020 data leak, where users’ email and mailing addresses and phone numbers were exposed, making many wary of this new feature.
In summary, the cryptocurrency industry is continually evolving as companies like Tether, Ripple, and Ledger navigate various challenges, such as banking crises, regulatory disputes, and security concerns. The recent developments show that the market is poised for growth and greater transparency, but at the same time, highlights the potential risks and obstacles faced by the industry’s players. As the market matures, more insight into the path forward will likely emerge.
Source: Cointelegraph
