Tether CEO Paolo Ardoino stated that the company continues to accumulate Bitcoin and gold while pursuing its strategy of expanding the dollar network globally. In a recent interview, Ardoino noted that Tether provides dollar liquidity worldwide through USDT and holds a significant amount of US Treasury bonds.
According to Ardoino, the company actively uses a portion of its operating profits to purchase Bitcoin and gold. The primary goal of this strategy is to protect Tether’s balance sheet against the potential devaluation of fiat currencies. The Tether CEO described Bitcoin as the foundation of all digital assets, arguing that cryptocurrency can provide natural inflation protection.
Tether’s use of company profits to purchase Bitcoin and gold is seen as part of its approach to diversifying its reserve structure. The company is expanding the global use of USDT while also including different asset classes in its reserves.
Ardoino also stated that one of the key factors hindering Bitcoin’s global adoption is the generation gap. He noted that many of the world’s major decision-makers are over 60 years old, and that these individuals do not fully understand Bitcoin.
The CEO of Tether stated that central banks prefer to buy gold every day, and a similar approach towards Bitcoin has not yet emerged. However, he argued that younger generations understand Bitcoin better and have a natural inclination towards adopting the digital asset.
Ardoino stated that a generational shift is needed for Bitcoin’s role in the global financial system to strengthen. According to him, greater involvement of younger generations in the financial system could accelerate Bitcoin’s long-term and natural adoption.
*This is not investment advice.
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The company behind the world’s largest stablecoin wants to replace Google. Or at least build an alternative that doesn’t require trusting a single company with every query you’ve ever typed.
Tether’s engineering team is developing Hypersearch, a fully decentralized peer-to-peer search engine built on distributed hash table (DHT) architecture. CEO Paolo Ardoino first announced the project on April 7, 2026, and by May 14 the team had already demonstrated a working P2P Wikipedia search engine.
How Hypersearch actually works Traditional search engines operate on a straightforward model: a company crawls the web, builds a massive index on its own servers, and serves results when you search. Hypersearch takes a fundamentally different approach by distributing both the index and the search process across a network of nodes.
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The technical backbone is Kademlia DHT, a protocol that allows nodes in a network to store and retrieve data without any single coordinator. Hypersearch is built on Tether’s HyperDHT infrastructure and the Holepunch stack, which enables direct connections between peers even when they’re behind firewalls or network address translators. The system is designed to be self-organizing, meaning nodes can join and leave the network without disrupting search capabilities. It’s engineered to handle queries across multiple data types including text, images, and location data.
The architecture targets scalability across thousands of nodes while maintaining high availability.
From stablecoins to software infrastructure Hypersearch sits alongside Keet, Tether’s encrypted messaging application that also runs on peer-to-peer architecture, and PearPass, a password manager built with similar privacy-first principles.
Tether is actively recruiting engineers with expertise in P2P networking, Kademlia DHT, and conflict-free replicated data types (CRDTs), a class of data structures that let multiple nodes update shared data simultaneously without coordination.
The Wikipedia demo and what it proves Ardoino’s May 14 demonstration of a P2P Wikipedia search engine proves the underlying infrastructure works. The project remains in early-stage development. There’s no public beta available, no whitepaper published, and the codebase is open-source.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.
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Tether’s Alloy gold-backed synthetic dollar reserves have crossed $210 million, according to the company’s transparency materials.
The milestone relates to Alloy and aUSDT, not standard USDT reserves. That distinction matters because Tether’s main stablecoin is fiat-backed, while Alloy uses a different structure: a synthetic dollar overcollateralized by Tether Gold.
In simple terms, Alloy is designed for users who want dollar-like liquidity while keeping exposure to gold-backed collateral.
That makes it a different product from ordinary USDT, and it should be treated that way.
For more details, visit the official Tether platform.
TL;DR Tether’s Alloy reserves have crossed $210 million. Alloy’s aUSDT is overcollateralized by Tether Gold. This is separate from standard fiat-backed USDT reserves. What Alloy Is Trying To Do Alloy is Tether’s attempt to combine gold exposure with dollar-denominated liquidity.
The product uses Tether Gold, or XAUt, as collateral. Users can mint a synthetic dollar asset, aUSDT, against that gold-backed collateral. The idea is to let gold holders access dollar-like liquidity without selling their gold exposure outright.
That is a more specialized product than USDT.
USDT is mainly used as a dollar stablecoin for trading, transfers, payments, and exchange liquidity. Alloy is aimed at users who want a collateralized synthetic dollar tied to gold-backed assets.
Why The $210M Figure Matters Crossing $210 million in reserves shows the product has reached a more meaningful scale.
It is still small compared with Tether’s broader stablecoin business, but it is not trivial. A nine-figure reserve base suggests real interest in gold-backed collateral structures.
That fits a wider market theme.
Crypto users are looking beyond simple stablecoins. Some want tokenized Treasuries. Some want on-chain yield products. Some want commodity-backed tokens. Alloy sits in that broader move toward more varied collateral.
Do Not Confuse aUSDT With USDT This is the most important point.
aUSDT is not the same product as USDT. It has a different backing model, different risks, and different use case. Confusing the two would mislead readers.
USDT’s reserve structure is tied to fiat, cash equivalents, Treasuries, and other disclosed assets. Alloy’s synthetic dollar design is tied to overcollateralized Tether Gold vaults.
That means the risk profile is different.
Gold price movements, collateral ratios, liquidation mechanics, smart contract design, and XAUt liquidity all matter for Alloy.
Gold Still Has A Crypto Audience Gold and Bitcoin are often treated as rivals, but crypto users have shown steady interest in tokenized gold.
Some investors want hard-asset exposure without leaving digital rails. Others want collateral that is not purely fiat-based. Gold-backed tokens give them a way to hold commodity exposure in a crypto-native format.
Alloy builds on that appetite.
It does not replace USDT. It expands the range of products Tether can offer around collateral and liquidity.
The Market Read Tether’s Alloy reserve growth shows the company is still experimenting beyond its core stablecoin business.
The $210 million milestone is not a systemic stablecoin event, but it does show demand for synthetic dollar products backed by tokenized gold. That demand may grow if users keep looking for alternatives to simple fiat-backed stablecoins.
The opportunity is clear: combine gold exposure with usable digital liquidity.
The risk is also clear: more complex collateral models need more careful disclosure and user understanding.
For now, Alloy’s growth gives the market another sign that the stablecoin sector is becoming more diverse, not less.
This article draws on Tether’s Alloy transparency materials.
This article was written by the News Desk and edited by Samuel Rae.
Tether isn’t just printing digital dollars anymore. CEO Paolo Ardoino has laid out a vision that positions the stablecoin giant as something closer to a sovereign wealth fund, one that distributes dollars globally while quietly amassing enormous reserves of Bitcoin and physical gold.
Tether has been buying between 1 and 2 tons of gold every single week. Let that accumulate over months, and you get approximately 140 tons of gold valued at roughly $23-24B.
Ardoino has indicated the company targets gold at approximately 10-15% of its investment portfolio. The purchases are funded not by minting more USDT, but by profits from Tether’s core operations. Tether earned an estimated $10-13.7B across 2024 and 2025, with expectations for 2026 running even higher. When your stablecoin has $186B in market circulation and you’re earning yield on the reserves backing it, the cash flow becomes almost absurdly large.
The company has also reportedly been hiring ex-HSBC traders and expanding into gold trading operations.
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Tether has been allocating up to 15% of its realized operating profits to Bitcoin since May 2023, building a position that now sits somewhere in the range of 83,000 to 100,000 BTC. At current prices, that Bitcoin treasury is worth north of $8B. Ardoino has described Bitcoin as a “digital inflation hedge” and, in more colorful terms, a crucial defense against what he called an “apocalyptic future.”
The Bitcoin allocation targets roughly 10% of the overall investment portfolio, mirroring the gold strategy. Together, these two hard-asset positions represent about 20-25% of Tether’s total reserves, with US Treasuries and cash equivalents making up the bulk of the company’s backing.
With approximately $186B in circulation, Tether’s stablecoin dwarfs every competitor and serves as the de facto digital dollar for emerging markets worldwide. In parts of Latin America, Africa, and Southeast Asia, USDT functions as a savings vehicle and payments rail in ways that traditional banking simply doesn’t reach.
Tether earns yield on the Treasury bonds and other instruments backing USDT, while users get the dollar exposure they want. USDT holders don’t earn interest, making the spread between what Tether earns on reserves and what it pays out the core business model.
The company has also launched Tether Gold (XAUT), a tokenized gold product that has been gaining traction. If Tether’s physical gold holdings continue to grow at the current pace, XAUT could allow the company to monetize its gold reserves twice: once through appreciation and once through tokenization fees.
Tether’s Bitcoin purchases represent a steady, programmatic source of buying pressure. A company allocating 15% of multi-billion-dollar annual profits to BTC on an ongoing basis creates a persistent bid in the market. Hiring traders from major banks and building physical commodity positions gives Tether credibility with institutional players who might otherwise dismiss a stablecoin company as a purely crypto phenomenon.
A company holding $186B in stablecoin liabilities, 140 tons of gold, and nearly 100,000 Bitcoin has become systemically relevant. Any shock to Tether’s operations, whether regulatory, operational, or reputational, would now send ripples through multiple asset classes simultaneously.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
Chilean crypto exchange Orionx, backed by USDt stablecoin issuer Tether, is shutting down after a forensic audit found that more than $7 million in customer assets had moved to wallets outside its custody. The firm said it began a permanent closure process after the audit, according to Cointelegraph reporting on the announcement. “Our sole priority now is to return as much of our clients’ assets as possible,” Orionx said, adding that withdrawals are temporarily suspended.
The Audit and the Shortfall The exchange said an internal review found that balances recorded in its systems exceeded the assets held at its custody addresses for Bitcoin, Ether, XRP and Polygon. Orionx did not specify when the transfers occurred or how the discrepancy was first uncovered. According to Chilean newspaper La Tercera, chief operating officer Thomas Mac Millan detected a “significant mismatch” between recorded balances and actual custody on August 27, which triggered the external forensic audit. The review came as Orionx worked to comply with Chile’s Fintech Law, having already brought in financial professionals during a 2025 review of its operations. Founded in 2017, Orionx has offered trading and payment services across Chile, Peru, Colombia and Mexico.
A Criminal Complaint Against Co-Founders Orionx said it filed a criminal complaint on Wednesday against former executives Roberto Zibert and Joaquín Díaz, both co-founders who allegedly had access to the company’s custody systems. The complaint reportedly alleges that assets were transferred out of Orionx’s custody between 2018 and 2021, including to accounts on other platforms. An account tied to Díaz allegedly received more than $1.5 million across 14 transfers, while another wallet received 187 Ether, more than 4.1 million USDT and 200,000 USDC from Orionx. Both co-founders denied wrongdoing, saying they never acted against customers’ interests.
Tether’s Latin America Bet Unravels The closure comes about 15 months after Tether exclusively led Orionx’s Series A as part of its push to expand digital-asset adoption across Latin America. The unraveling contrasts with Tether’s broader regional ambitions, which have also included crypto-mining and energy projects in South America that have faced their own setbacks. Orionx said its focus now is returning client funds rather than continuing operations.
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Crypto holders increased their use of digital asset-backed loans in 2026 as weaker markets reshaped borrowing habits and collateral preferences.
Crypto holders relied more on loans backed by digital assets as market conditions weakened in 2026, according to research from CryptoQuant.
The report analyzed data from crypto lender CoinRabbit. It found higher borrowing activity among both retail and high-net-worth users.
Borrowing Activity Rises Crypto-backed loans allow holders to access cash without immediately selling their digital assets. Borrowers usually pledge more collateral than they receive, but falling prices can trigger liquidation or require more collateral.
According to the report, retail users recorded the biggest change in borrowing activity during the period. Their average number of loans rose 74%, from 30.8 per user in 2025 to 53.5 in 2026, while high-net-worth users rose 18%, from 16.5 to 19.4.
Repeat borrowing also became more common across the platform. The share of users taking multiple loans increased from 61.9% to 65.1%. Retail borrowers waited an average of 21 days between loans, compared with 11 days previously.
Beyond borrowing activity, collateral preferences also shifted, particularly among wealthier users. Bitcoin’s share of pledged assets among high-net-worth users fell from 57.8% to 30.5%, while Zcash reached 24.2% after not appearing among the previous top 10.
CryptoQuant linked part of Zcash’s rise in collateral use to its sharp price rally. Zcash climbed from about $50 in late 2025 toward $800, while Monero, Chainlink and Cardano also gained larger shares among high-net-worth collateral.
You may also like: Bitcoin’s 4-Year Cycle Could Be Changing: Willy Woo Reveals What Could Replace It 8 in a Row: Ripple (XRP) ETFs Record Another Green Week but Warning Signs Return Bitcoin Holders Just Cashed Out 110,000 BTC in Profits: Is a Bigger Price Drop Coming? Shifting Asset Preferences Retail users continued to rely heavily on XRP as collateral during the period. However, its share fell from 41.7% to 35.2%, while Bitcoin remained close behind. TRON, Stellar, BNB, Kaspa, and Velo also entered the mix.
Meanwhile, the assets users traded most frequently changed during the period as market conditions shifted. Tether and Bitcoin remained the two largest assets by volume, while USD Coin moved into third place. Flare, Ether, and Ondo also entered the top 10.
Solana, Stellar, and Shiba Inu dropped out of the top 10 by trading volume. Together, these changes show that users adjusted both their borrowing and asset preferences during the weaker market period.
Orionx, a Chilean crypto exchange backed by USDt stablecoin issuer Tether, is shutting down after uncovering a multimillion-dollar issue linked to asset custody.
The exchange said it began a permanent closure process after a forensic audit found more than $7 million in custodial assets had moved to wallets it did not manage, according to a company announcement shared on X on Thursday.
“Our sole priority now is to return as much of our clients’ assets as possible,” Orionx said, adding that withdrawals are temporarily suspended.
The closure comes just 15 months after Tether led Orionx’s Series A as part of its push to expand digital asset adoption in Latin America.
Orionx leaves timing of $7 million transfers unclearOrionx’s post did not specify when the more than $7 million in transfers occurred or how the discrepancy was initially uncovered.
As part of its efforts to comply with Chile’s Fintech Law, Orionx conducted a review of its operations in 2025 and brought in financial professionals, according to the major Chilean newspaper La Tercera, citing the company’s criminal complaint.
On Aug. 27, chief operating officer Thomas Mac Millan detected a “significant mismatch” between balances recorded in Orionx’s systems and assets actually held in custody, according to the complaint.
An internal review followed, and Orionx later commissioned an external forensic audit that compared its records with data verifiable onchain. The audit found that balances recorded in Orionx’s systems exceeded the assets held at its custody addresses for Bitcoin (BTC), Ether (ETH), XRP and Polygon (POL).
The criminal complaint reportedly alleges that assets were transferred out of Orionx’s custody between 2018 and 2021, including to accounts on other crypto platforms.
Orionx accuses co-founders, who deny wrongdoingOrionx said it filed a criminal complaint on Wednesday against former executives Roberto Zibert and Joaquín Díaz, both co-founders who allegedly had access to the company’s crypto custody systems.
The complaint alleges that an account associated with Díaz received more than $1.5 million across 14 transfers, while another wallet allegedly received 187 Ether, more than 4.1 million USDt (USDT) and 200,000 USDC from Orionx, La Tercera reported.
Former executive and Orionx co-founder Roberto Zibert. Source: LinkedIn
Zibert and Díaz denied the allegations, saying they never acted against customers’ interests and that the cause of Orionx’s asset shortfall remains unclear.
Tether backed Orionx in 2025Founded in Chile in 2017, Orionx grew from a retail crypto exchange into a platform offering crypto payment and financial services in Chile, Peru, Colombia and Mexico.
Tether invested in Orionx in June 2025, exclusively leading the exchange’s Series A funding round, according to an archived version of Tether’s announcement. The announcement is no longer available on Tether’s website.
Cointelegraph contacted Tether and Orionx for comment but had not received a response by publication.
Magazine: Tether sued over $42M in frozen coins, 6,600 students get crypto loans: Asia Express
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
Orionx, a Chilean crypto exchange backed by USDt stablecoin issuer Tether, is shutting down after uncovering a multimillion-dollar issue linked to asset custody.
The exchange said it began a permanent closure process after a forensic audit found more than $7 million in custodial assets had moved to wallets it did not manage, according to a company announcement shared on X on Thursday.
“Our sole priority now is to return as much of our clients’ assets as possible,” Orionx said, adding that withdrawals are temporarily suspended.
The closure comes just 15 months after Tether led Orionx’s Series A as part of its push to expand digital asset adoption in Latin America.
Orionx leaves timing of $7 million transfers unclearOrionx’s post did not specify when the more than $7 million in transfers occurred or how the discrepancy was initially uncovered.
As part of its efforts to comply with Chile’s Fintech Law, Orionx conducted a review of its operations in 2025 and brought in financial professionals, according to the major Chilean newspaper La Tercera, citing the company’s criminal complaint.
On Aug. 27, chief operating officer Thomas Mac Millan detected a “significant mismatch” between balances recorded in Orionx’s systems and assets actually held in custody, according to the complaint.
An internal review followed, and Orionx later commissioned an external forensic audit that compared its records with data verifiable onchain. The audit found that balances recorded in Orionx’s systems exceeded the assets held at its custody addresses for Bitcoin (BTC), Ether (ETH), XRP and Polygon (POL).
The criminal complaint reportedly alleges that assets were transferred out of Orionx’s custody between 2018 and 2021, including to accounts on other crypto platforms.
Orionx accuses co-founders, who deny wrongdoingOrionx said it filed a criminal complaint on Wednesday against former executives Roberto Zibert and Joaquín Díaz, both co-founders who allegedly had access to the company’s crypto custody systems.
The complaint alleges that an account associated with Díaz received more than $1.5 million across 14 transfers, while another wallet allegedly received 187 Ether, more than 4.1 million USDt (USDT) and 200,000 USDC from Orionx, La Tercera reported.
Former executive and Orionx co-founder Roberto Zibert. Source: LinkedIn
Zibert and Díaz denied the allegations, saying they never acted against customers’ interests and that the cause of Orionx’s asset shortfall remains unclear.
Tether backed Orionx in 2025Founded in Chile in 2017, Orionx grew from a retail crypto exchange into a platform offering crypto payment and financial services in Chile, Peru, Colombia and Mexico.
Tether invested in Orionx in June 2025, exclusively leading the exchange’s Series A funding round, according to an archived version of Tether’s announcement. The announcement is no longer available on Tether’s website.
Cointelegraph contacted Tether and Orionx for comment but had not received a response by publication.
Magazine: Tether sued over $42M in frozen coins, 6,600 students get crypto loans: Asia Express
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
Chilean crypto exchange Orionx, backed by Tether, announced it is initiating permanent closure procedures. A forensic audit previously uncovered that over $7 million in customer custodial assets were transferred to wallets not managed by the platform. Withdrawals are currently suspended, and the company stated its sole priority is to return customer assets as much as possible. The audit revealed that Orionx’s system-recorded balances of BTC, ETH, XRP, and POL exceeded the actual holdings in its custodial addresses. The firm has filed criminal complaints against two co-founders and former executives, Roberto Zibert and Joaquín Díaz, alleging the relevant assets were transferred between 2018 and 2021. The two denied the allegations, claiming they never harmed customer interests, and the cause of the asset shortfall remains unclear. Tether exclusively led Orionx’s Series A funding round in June 2025, approximately 15 months prior to the closure announcement. As of press time, Tether and Orionx had not responded to requests for comment.
Tether, the company behind the world’s largest stablecoin, is quietly becoming one of the most important buyers of US government debt. With over $122 billion in direct Treasury bill holdings and a total exposure exceeding $141 billion when indirect positions are included, the firm has already outpaced several sovereign nations in its appetite for American paper.
From stablecoin issuer to Treasury heavyweight Every USDT token in circulation needs to be backed by reserves, and Tether has chosen to park the vast majority of those reserves, roughly 83%, in US Treasury bills. As USDT’s market cap has ballooned to approximately $185 billion, the company has been forced to hoover up T-bills at a pace that would make most central banks raise an eyebrow.
In 2024, Tether made net Treasury purchases of $33.1 billion. That was enough to rank it seventh among all foreign buyers of US debt. In 2025, the figure came in at $28.2 billion, again landing in seventh place globally.
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Tether has described itself as the fifth-largest purchaser of US Treasuries when hedge fund activity is excluded from the rankings. The company’s CEO has stated expectations that Tether will climb into the top 10 purchasers of T-bills in 2026, driven by continued USDT growth and new product lines.
What’s fueling the growth Tether reports adding approximately 30 million new users per quarter, bringing its total user base to around 530 million. Each new user who acquires USDT effectively triggers demand for more reserve assets, and Tether’s reserve policy channels that demand straight into the Treasury market.
This flywheel generated over $10 billion in profits for Tether in 2025, almost entirely from the yield on its Treasury portfolio.
US Treasury Secretary Scott Bessent has publicly discussed the potential for stablecoin issuers to become a structural source of demand for T-bills, projecting that the sector could eventually absorb between $800 billion and $1 trillion in Treasuries as it scales.
Why Washington isn’t complaining Stablecoin legislation moving through Congress would formalize reserve requirements that effectively mandate Treasury holdings, creating a regulatory framework that locks in this demand. Tether’s 83% allocation to Treasury bills is a far cry from the opaque mix of commercial paper and other instruments that drew scrutiny in earlier years.
The risks that come with scale If USDT ever experienced a rapid redemption event, Tether would need to liquidate tens of billions in T-bills in a compressed timeframe. Treasury bills are among the most liquid instruments on earth, but selling $50 billion or more in a panic scenario could still create ripples in short-term funding markets.
Competitors like Circle, which issues USDC, also hold substantial Treasury reserves but at a smaller scale. As stablecoin legislation takes shape, the reserve requirements embedded in new laws could push the entire sector deeper into Treasuries, potentially validating Bessent’s $800 billion to $1 trillion projection.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
Chilean crypto exchange Orionx began permanently closing its operations on Sept. 3 after a forensic audit identified a custody shortfall exceeding $7 million.
Summary
Orionx began permanently closing after an audit found over $7 million missing from custodial wallets. Customer withdrawals remain suspended while Orionx calculates balances and prepares its planned asset restitution process. Chile’s financial regulator rejected Orionx’s authorization application in June and never supervised the platform’s activities. Orionx filed a criminal complaint against two cofounders who have categorically denied the company’s allegations. Tether led Orionx’s Series A financing in June 2025, fifteen months before the closure announcement. The company suspended customer withdrawals and said it could not guarantee that every client would recover 100% of their assets.
The exchange said the audit found transactions that moved assets under its custody to wallets it did not control. Orionx has filed a criminal complaint with Chilean prosecutors and launched a restitution process intended to return as much as possible to customers.
The allegations have not been proven in court. The two former executives named in the complaint have denied wrongdoing and said the cause of the shortfall remains unresolved.
Información importante
Hoy Orionx informó el inicio de un proceso de cierre definitivo de sus operaciones.
Revisa toda la informacion en https://t.co/OamPFTfoDo
Atención: Nunca te pediremos claves, códigos 2FA ni transferencias por teléfono, WhatsApp, email o redes sociales. pic.twitter.com/5eiDyqR0Cg
— Orionx (@orionx) September 3, 2026 Orionx audit found four affected crypto assets Orionx announced the closure through its website and official account. It described the decision as definitive and warned customers about potential impersonation attempts during the closure.
The exchange said it would never request private keys, two-factor authentication codes or transfers by telephone, WhatsApp, email or social media. The warning is relevant because customers waiting to recover funds can become targets for phishing and fraudulent recovery services.
According to information Orionx provided to clients, the shortfall affects Bitcoin, Ether, XRP and Polygon balances. These assets appeared as available in Orionx’s internal records but could not be fully verified at addresses controlled by the company.
A comparison of company records and blockchain data found that the recorded customer balances exceeded the assets held in Orionx’s custody wallets. The audit therefore identified a balance-sheet and custody mismatch rather than a reported compromise of the four blockchain networks.
However, Orionx has not published the affected wallet addresses, complete transaction hashes or a breakdown of the shortfall by asset. Independent blockchain researchers consequently cannot yet verify the company’s full calculation.
The exchange also has not provided an exact number of affected customers. Its disclosure does not establish how much of the $7 million may be recovered from external wallets, exchanges or individuals named in the legal proceedings.
Criminal complaint names two Orionx cofounders Orionx submitted a criminal complaint on Sept. 2 against former general manager Roberto Zibert and former technology manager Joaquín Díaz. Both helped establish the exchange and allegedly had privileged access to its cryptocurrency custody systems.
The complaint accuses them of alleged unfair administration and asks prosecutors to investigate any other offenses supported by the evidence. Local business newspaper Diario Financiero reported that a forensic examination linked the custody mismatch to wallets outside Orionx’s control.
Details reported by La Tercera place the questioned transactions between 2018 and 2021. Other local reporting says the largest group of transfers may have occurred during 2021 and 2022. That timing remains an allegation drawn from the complaint, not a judicial finding.
The filing reportedly claims that an account associated with Díaz received more than $1.5 million through 14 transfers. It also identifies another wallet that allegedly received 187 ETH, more than 4.1 million USDT and 200,000 USDC from Orionx-related addresses.
Those figures require examination by prosecutors and the court. A transfer into an address does not, by itself, establish who controlled the wallet at the time or whether a crime occurred.
Zibert and Díaz have “categorically rejected” the accusations. In a joint response reported by Chilevisión, they said they never acted against customer interests.
Their statement added that the cause of the custody deficit had not been established. Neither former executive has been convicted, and the complaint begins an investigative process rather than proving Orionx’s claims.
Chilean regulator cannot order customer repayments Chile’s Financial Market Commission clarified on Sept. 4 that Orionx was neither registered nor authorized under the country’s Fintech Law. The regulator said it did not supervise Orionx’s activities and does not control its closure.
The official statement also disclosed that the commission rejected Orionx’s registration and authorization application on June 19. Until that rejection, the exchange had operated under a transitional arrangement available to companies awaiting licensing decisions.
After the application was rejected, Orionx could only conclude existing operations. It could not enter into new regulated transactions under the transitional regime and had to explain the wind-down process to customers.
The commission also said Orionx had not demonstrated that it held the guarantees required from authorized financial service providers. This does not prove the alleged custody misconduct, but it affects the legal protections available during the closure.
Although Orionx told customers that it had notified the relevant authority about its closure plan, the commission stressed that it neither approved nor supervises that plan. It also lacks authority to direct Orionx to return customer assets.
The regulator advised customers to contact the company directly and preserve account statements, transaction records and communications. Customers can pursue claims through Chilean courts or provide evidence to prosecutors if they believe a crime occurred.
Tether invested in Orionx 15 months before closure Tether led Orionx’s Series A financing in June 2025 as part of a strategy to expand stablecoin infrastructure across Latin America. Neither company publicly disclosed the investment’s value or Tether’s ownership percentage.
At the time, the companies said the financing would support remittances, payment collection and corporate treasury services in Chile, Peru, Mexico and Colombia. The investment was presented as a way to expand digital financial access across the region.
Crypto.news reported that the deal gave Tether exposure to a Chilean exchange offering services across four Latin American markets. The announcement described how the funding would support Orionx’s regional payments and stablecoin expansion.
Tether’s original announcement is no longer available at its former website address, although an archived copy remains accessible. Its removal does not establish when or why Tether took the page offline.
Tether has not publicly said whether it retained its investment when Orionx announced the closure. It has also not disclosed whether it held board rights, received financial reports or participated in custody oversight.
The stablecoin issuer continued investing in regulated and licensed companies elsewhere. Its later Latin American expansion included a minority investment in Bit2Me, part of a broader pattern of Tether-backed regional financial infrastructure deals.
Customers face an uncertain restitution process Orionx said its first closure phase is underway, but it has not published a repayment calendar. Withdrawals remain suspended to prevent some customers from recovering assets ahead of others while account balances are reviewed.
The exchange said its priority is to return “the greatest possible amount” of customer assets. That wording confirms that full repayment is uncertain. It should not be interpreted as a commitment to make every customer whole.
The next verifiable developments will come from Orionx’s customer notices, Chilean prosecutorial actions and any court decisions affecting the disputed wallets. Publication of transaction hashes would also allow independent researchers to evaluate the alleged asset movements.
Customers will need individual balance confirmations before Orionx can determine their share of available assets. Recovery could also depend on whether prosecutors locate funds at other exchanges or obtain orders freezing wallets linked to the disputed transfers.
TLDR: Orionx is shutting down after a $7M+ customer asset shortfall was confirmed. Withdrawals are frozen while Orionx pursues criminal complaints against ex-executives. Chile’s regulator rejected Orionx’s registration bid just months before the audit. Tether backed Orionx’s 2025 Series A round as its sole investor. Orionx, a Chilean crypto exchange backed by Tether, has begun shutting down for good. A forensic audit uncovered more than $7 million in customer assets moved to wallets outside company control.
The exchange suspended all withdrawals and filed criminal complaints against two former executives. Chile’s financial regulator had already rejected Orionx’s registration bid months earlier.
Orionx Asset Shortfall Triggers Criminal Complaints Orionx filed a complaint with Chile’s Public Prosecutor’s Office once the audit findings surfaced.
The company says the audit confirmed transfers of assets held in custody to wallets it does not manage. That shortfall now exceeds $7 million, according to the announcement. Orionx says the discovery prompted an immediate internal review of its custody practices.
Investigators are examining transfers involving Bitcoin, Ethereum, XRP and Polygon’s POL token. Orionx named co-founders Roberto Zibert and Joaquín Díaz in a criminal complaint filed September 2, 2026.
The company alleges the transfers took place between 2018 and 2021. Those years mark a period of rapid growth for the exchange in Chile’s crypto market.
Both men have denied any wrongdoing tied to the alleged transfers. Orionx has not disclosed additional details about how the funds left its custody.
The exchange has not named a recovery timeline for affected clients. No third party has independently confirmed the location of the missing assets.
The exchange says client funds remain its top priority during the shutdown. Withdrawals stay frozen so no customer gains an advantage over another during the closure.
Orionx describes the freeze as a temporary measure tied to its restitution process. The company says every phase of that process will be reported to clients directly.
Tether-Backed Chilean Crypto Exchange Orionx Shuts Down After $7M+ Asset Shortfall
Chilean crypto exchange Orionx has begun a permanent shutdown after a forensic audit found that more than $7 million in customer assets had been transferred to wallets outside the company’s… pic.twitter.com/DtmTz74XxB
— Wu Blockchain (@WuBlockchain) September 6, 2026
Tether-Backed Exchange Faces Regulatory Setback Tether led Orionx’s Series A funding round in June 2025 as its exclusive investor. That original announcement no longer appears on Tether’s website, though the deal was previously public.
Tether has not issued a fresh statement addressing the shutdown. The stablecoin issuer’s earlier backing had raised Orionx’s profile among regional traders.
Chile’s financial regulator rejected Orionx’s registration application in June 2026. That rejection came months before the forensic audit exposed the asset shortfall.
Orionx continued operating in the crypto market despite the setback. Regulators have not commented publicly on the newly disclosed shortfall.
Orionx has submitted a Closure and Asset Restitution Plan to Chilean authorities.
The company says the plan’s first phase is now being implemented. Orionx has not disclosed a full timeline for completing the restitution process. Clients are still awaiting word on when frozen funds might move again.
Orionx pledged to keep clients informed as the process continues. The company called the situation a source of concern and uncertainty for its users.
Orionx says it will handle the closure with transparency and respect for its customers. The exchange reiterated that returning client assets remains its singular focus.
Key Points Orionx, a Chilean cryptocurrency platform, has ceased operations following a forensic investigation that uncovered over $7 million in client funds transferred to unauthorized external wallets The platform has halted all withdrawal activity, impacting more than 100,000 registered accounts with uncertain recovery prospects Legal action has been initiated against platform co-founders Joaquín Díaz and Roberto Zibert, both of whom have rejected the accusations The unauthorized asset movements reportedly took place between 2018 and 2021, involving Bitcoin, Ethereum, XRP, and Polygon tokens The exchange received Series A investment from Tether in June 2025, merely 15 months prior to its collapse A major Chilean cryptocurrency trading platform, Orionx, has announced its permanent closure following the discovery that over $7 million in client assets were transferred to wallets beyond the platform’s authorized control, according to findings from a comprehensive forensic investigation.
Tether-Backed Chilean Crypto Exchange Orionx Shuts Down After $7M+ Asset Shortfall
Chilean crypto exchange Orionx has begun a permanent shutdown after a forensic audit found that more than $7 million in customer assets had been transferred to wallets outside the company’s… pic.twitter.com/DtmTz74XxB
— Wu Blockchain (@WuBlockchain) September 6, 2026
On September 3, 2026, the exchange publicly disclosed its shutdown decision and simultaneously froze all withdrawal capabilities. More than 100,000 account holders now face uncertainty regarding the recovery of their digital holdings.
Discovery of the Asset Discrepancy Thomas Mac Millan, serving as Orionx’s chief operating officer, identified inconsistencies between reported account holdings in the platform’s database systems and the actual cryptocurrency reserves held in custody wallets on August 27.
Following this discovery, the company initiated an internal investigation before engaging independent forensic specialists to conduct a thorough examination. The external auditors cross-referenced internal transaction records with blockchain data, ultimately validating the substantial deficit.
The unaccounted assets encompass multiple cryptocurrencies including Bitcoin, Ethereum, XRP, and Polygon tokens. The aggregate value of missing funds surpassed $7 million.
According to investigative findings, the questionable asset transfers occurred during a three-year period spanning 2018 through 2021, suggesting the platform potentially operated with inadequate customer reserves for several years without detection.
One day before publicly announcing the shutdown, Orionx submitted criminal complaints targeting two of its founding members, Joaquín Díaz and Roberto Zibert.
The formal complaint asserts that a cryptocurrency wallet connected to Díaz received transfers exceeding $1.5 million distributed across 14 distinct transactions. A separate wallet allegedly obtained 187 Ether tokens, in addition to more than 4.1 million USDT and 200,000 USDC.
Both accused co-founders have publicly disputed these claims. They maintain they never engaged in activities detrimental to customer interests and assert that the actual source of the asset shortfall has not been definitively established.
Tether’s Investment and Regulatory Obstacles In June 2025, Tether spearheaded Orionx’s Series A capital raise. The financial backing aimed to broaden stablecoin infrastructure and accelerate digital dollar adoption throughout Latin American markets.
Since its 2017 establishment, Orionx had maintained operations across Chile, Peru, Colombia, and Mexico.
The platform’s closure coincides with regulatory challenges. Chile’s Financial Market Commission denied Orionx’s operating license request in June 2026, officially confirming the exchange had been conducting business without required regulatory approval under the country’s Fintech Law framework.
The regulatory body has explicitly stated it will not participate in overseeing the closure procedures or any customer reimbursement efforts. Orionx has indicated it will handle the resolution process independently.
The platform has communicated a multi-stage strategy for returning digital assets to users, though it has stopped short of guaranteeing complete restitution for all affected customers.
As of publication, Tether has remained silent regarding the exchange’s collapse. According to Cointelegraph’s reporting, neither Tether representatives nor Orionx officials provided responses to media inquiries requesting official statements.
Thai businessmen sue Tether for freezing $42M Two Thai businessmen have sued stablecoin issuer Tether in a New York district court, claiming it illegally froze $42.4 million in Tether USDt (USDT) in October, as part of a broader case tied to a pig butchering scheme.
The plaintiffs claimed that Tether illegally froze the $42 million without a warrant in October 2025, following an informal request from US Homeland Security Investigations.
Authorities in the Eastern District of North Carolina only issued a seizure warrant for the funds later in February 2026. The warrant directed the burn and reissuance of the tokens to a government wallet.
The plaintiffs vigorously deny any involvement in the investment scam, and their lawyer Mark Beckett said “this situation demonstrates that the government can seize stablecoins used in legitimate business transactions on the basis of inaccurate information.”
Thailand adopts crypto Travel Rule with self-custodial wallet checksThailand is tightening oversight of crypto transfers, including transactions involving self-custodial wallets, as it moves to align with global Anti-Money Laundering (AML) standards.
Thailand’s Securities and Exchange Commission (SEC) issued new Travel Rule regulations requiring digital asset operators to collect information about parties involved in crypto transfer.
The rules will take effect on Feb. 27, 2027.
Thailand SEC proposes retail access to regulated overseas crypto derivativesThailand’s Securities and Exchange Commission (SEC) has proposed allowing intermediaries to facilitate retail access to certain digital asset derivatives traded overseas.
Under the proposal, eligible products would need to resemble crypto derivatives traded in Thailand, including their underlying assets, maturity, leverage and settlement methods.
The products must also trade on an exchange that uses a central counterparty for clearing and is overseen by a regulator belonging to specified international regulatory or exchange groups.
The consultation remains open until Sept. 30.
ASIA
Pencil Finance completes $1M onchain lending cycle for 6.6K students in Southeast AsiaPencil Finance has completed a $1 million onchain student loan cycle, offering financing to 6,600 students in Southeast Asia who were underserved by traditional lenders.
Of the 6,600 students across 118 schools and universities in Southeast Asia, about 1,050 received direct funding. Pencil said the loans were designed for students underserved by traditional lenders, with 50% female borrowers and 93% stemming from lower-income households.
Pencil Finance claims this is the first-ever fully onchain lending cycle financing student loans transparently recorded on the blockchain network.
Asia crypto custody deals from Ripple and CoincheckRipple has partnered with digital asset infrastructure company SettleMint to offer financial institutions solutions for custody, issuance and management of tokenized assets across their full lifecycle.
Digital asset service provider Coincheck Group has also partnered with wallet infrastructure provider DFNS to build digital asset wallet technology and custody services in Japan.
SINGAPORE
Singapore weighs recognizing some foreign-issued stablecoinsThe Monetary Authority of Singapore (MAS) is reconsidering its earlier restriction on stablecoins issued across multiple jurisdictions, proposing a route for some jointly issued tokens to qualify under its regulatory framework.
Under one proposal, stablecoins jointly issued by a Singapore issuer and a foreign issuer could be regulated under the framework and labeled “MAS-regulated stablecoins,” provided that the associated risks are sufficiently mitigated.
MAS is also considering recognizing a limited number of foreign-issued stablecoins regulated under comparable overseas frameworks, citing their potential use in cross-border wholesale transactions.
AUSTRALIA
Australia warns unlicensed crypto firms of fines up to 10% of annual turnoverAustralian crypto companies relying on temporary regulatory relief have until Sept. 30 to apply for a financial services license or risk penalties, including fines reaching 10% of their annual turnover.
The Australian Securities and Investments Commission (ASIC) said businesses requiring an Australian Financial Services license must apply for one or seek changes to an existing license before the deadline.
ASIC has recorded more than 45 digital asset-related license applications to date.
UAE
Standard Chartered launches spot Bitcoin and Ether trading in UAELondon-headquartered multinational bank Standard Chartered has launched spot Bitcoin and Ether trading for institutional clients in the United Arab Emirates (UAE).
The move makes Standard Chartered the first global bank to offer institutional digital asset trading in the region and the first Global Systemically Important Bank (G-SIB) with a similar offering, the bank said.
JAPAN
Japan’s Remixpoint dumps altcoinsRemixpoint, one of Japan’s largest corporate Bitcoin holders, sold all its altcoins, leaving about 1,506 BTC ($115 million) as its only cryptocurrency holding as it concentrates its crypto strategy around Bitcoin.
Remixpoint sold its Ether, Solana, XRP and Dogecoin holdings for a combined 878.8 million yen ($5.5 million), generating a 117.8 million yen ($736,000) gain, according to a Wednesday company disclosure.
The company recorded gains on its ETH, SOL and XRP sales but sold its DOGE holdings at a 3.26 million yen ($20,000) loss.
Japanese regulator seeks stablecoin tax exemptionJapan’s Financial Services Agency (FSA) submitted a request to exempt trust-type stablecoins from mandatory tax filings starting in fiscal year 2027.
Metaplanet moves 4,800 BTC worth $377M to CoinbaseThe Japanese Bitcoin treasury company has transferred 10,270 BTC to Coinbase Prime this week, triggering speculation about the company selling its holdings.
Japan’s FSA Warns Hong Kong-Based IZAKA-YA Over Unregistered ServicesJapan’s Financial Services Agency issued a formal warning to Hong Kong-based Izakaya Limited, alleging its cryptocurrency exchange services are unregistered.
SBI Holdings Takes 20% Stake in Indonesia’s Ajaib GroupJapan’s SBI Holdings will spend $270 million to acquire a 20% stake in Indonesian online brokerage Ajaib Group. The aim is to expand its crypto business across the region and to promote SBI’s yen stablecoin JPYSC.
HONG KONG
Hashkey joins DTCC working group as first Asian crypto service providerHashkey joined the Depository Trust & Clearing Corporation’s (DTCC) Digital Assets Advisory Services Industry Working Group as its first Asian digital asset service provider.
Hashkey joins over 100 other global financial institutions including JPMorgan Chase, Goldman Sachs, Nasdaq and the New York Stock Exchange.
DTCC custodies $114 trillion in liquid assets, including stocks and exchange-traded funds. Its working group was formed to connect traditional finance with decentralized finance (DeFi) infrastructure. DTCC plans to launch access to tokenized securities in October.
Bitcoin Asia conference ‘subdued’The mood at Bitcoin Asia in Hong Kong was subdued according to the South China Morning Post.
Despite a pep talk by Binance founder Changpeng Zhao who declared Bitcoin “will for sure become more important than gold” the bear market hangover was all too evident.
“Psychologically, I think this has been one of the hardest bear markets we’ve had, because this time it wasn’t just the price of bitcoin that took a hit,” said Brandon Green, CEO of conference organiser BTC, during his opening address.
“This time, the Bitcoiners’ ego also took a hit.”
OSL Group Reports 65.8% Revenue SurgeHong Kong-based digital asset firm OSL Group reported a 65.8% revenue increase in its first-half financial results.
SFC warns Star Bridge Capital is unlicensedHong Kong’s Securities and Futures Commission has added Star Bridge Capital Group to its Alert List following forced liquidation anomalies and millions in trader losses.
KOREA
Mirae Asset lays out crypto, stablecoin, tokenization plans for Digital XSouth Korean financial group Mirae Asset plans to build a 150 trillion won ($109 billion) digital asset business around Digital X, the crypto exchange formerly known as Korbit, according to The Korea Times.
The report said Digital X will focus on crypto, stablecoins, real-world assets and security token offerings, with plans to tokenize physical assets including gold, silver and electricity.
The expansion plans follow Mirae Asset Consulting’s acquisition of a 97.15% stake in Korbit in July for a cumulative 141.4 billion won. The exchange was subsequently rebranded as Digital X, marking the first time an affiliate of a South Korean financial group acquired control of a domestic crypto exchange.
Cointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Some articles contain affiliate links, from which Cointelegraph may earn a commission. These relationships do not influence which products we review or our editorial conclusions. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.
Trump says Iran conflict 'not a major issue for the US': Current situation is not a state of war.
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A planned dollar stablecoin backed by 21 global financial institutions will begin with regulatory resources, corporate relationships, and international payment connections. Four industry executives told crypto.news, however, that institutional backing will not guarantee adoption unless the token can match the liquidity, accessibility and portability already offered by USDT and USDC.
Summary
The 21-member consortium plans to launch its dollar stablecoin during the first half of 2027. Experts said established banking relationships could help the token gain early institutional distribution. Interoperability, wallet support, and reliable redemption will determine whether it circulates beyond member banks. The consortium must identify who carries legal responsibility for reserves, redemptions, and transaction failures. USDT and USDC could lose market share even as bank-issued tokens expand the overall stablecoin market. The consortium committed to forming a new stablecoin company during the second half of 2026, subject to closing conditions. Its members include Bank of America, Citi, Goldman Sachs, Deutsche Bank, UBS, and other financial institutions across North America, Europe, Asia, Africa, and the Middle East.
The unnamed venture intends to launch a US dollar-denominated stablecoin during the first half of 2027. It may later introduce stablecoins tied to other G7 currencies, with a euro-denominated token listed as its first expansion priority.
The consortium has not disclosed the token’s name, supported blockchains, reserve custodian, governance model, or redemption process. Those details could determine whether the product becomes a widely used payment instrument or remains primarily a settlement token within the institutions’ existing networks.
21-bank stablecoin starts with a distribution advantage Utkarsh Ahuja, founder and managing partner at Moon Pursuit Capital, told crypto.news that the consortium starts with relationships that normally take new financial products years to develop.
The participating institutions already serve corporate treasury departments, process international payments, and operate compliance systems across several jurisdictions. According to Ahuja, those connections could make it easier to introduce the stablecoin into existing corporate workflows, particularly for cross-border settlement.
“The banks start with something that normally takes a financial product years to build: distribution into the companies that actually move very large amounts of money.”
Ahuja cautioned that established relationships do not provide the portability that USDT and USDC have built across exchanges, wallets, blockchains, and market makers. The consortium could bring corporate clients to the token, he said, but convincing those clients to use it outside the participating banks’ network will be more difficult.
Jerald David, CEO of Lynq Network, said the initiative has both offensive and defensive motives. It could open new blockchain payment revenue for the institutions while protecting payment activity and commercial balances from migrating to non-bank stablecoin issuers.
Stablecoin issuers can earn income from the assets held against circulating tokens, including short-term government debt. When deposits move from banks into stablecoins, part of the balance and its associated economics can move with them.
David said a shared token would allow the institutions to enter blockchain payments through a framework over which they retain greater control. However, he warned that scale alone would not make the proposed token more attractive than established alternatives.
USDT and USDC currently benefit from years of integration. A recent crypto.news analysis of stablecoin distribution placed the wider market at approximately $316 billion in mid-2026, with USDT accounting for about $187 billion and USDC representing roughly $75 billion.
Interoperability will decide whether the token circulates David described issuance as the easier part of the project. Businesses will also need reliable ways to move between the consortium’s stablecoin, existing stablecoins, tokenized deposits and conventional bank accounts.
“Interoperability will be more important than issuance,” David said.
“If capital can enter the token easily but cannot move out or across networks just as efficiently, the consortium risks creating another isolated pool of liquidity.”
Such interoperability would require dependable minting and redemption, custody arrangements, market makers, and settlement infrastructure connecting different forms of digital and conventional money. An institution receiving the new token must be able to redeem it for dollars or exchange it without facing long delays, high spreads, or limited trading depth.
Alvin Kan, chief operating officer of Bitget Wallet, told crypto.news that self-custodial wallets would examine the token’s entire user journey before supporting it. Relevant functions include holding, transferring, swapping, and spending the stablecoin.
Wallet providers would need audited smart contracts, transparent issuance and redemption processes, and consistent technical standards across every supported blockchain, according to Kan. They would also need to know whether tokens are issued natively on each network or transferred through bridges.
Kan said native mint-and-burn systems or coordinated cross-chain issuance would generally be preferable to wrapped assets because they could reduce bridge risks and prevent liquidity from being split among several representations of the same stablecoin.
Wallets could use intent-based routing and liquidity aggregation to shield users from some of that complexity. However, Kan said wallets cannot eliminate fragmentation without cooperation from issuers, banks, and liquidity providers.
“Ultimately, interoperability will matter more than how many bank tokens get issued. The winning infrastructure will make multiple tokens feel like one connected financial system.”
Gas abstraction could remove another obstacle. Users may be less willing to adopt a dollar stablecoin if they must first acquire a separate blockchain token to pay network fees whenever they transfer or spend it.
The same problem applies to identity verification. Kan said reusable credentials or privacy-preserving attestations could allow users to demonstrate that they have completed required checks without repeating the full process for every issuer. Different regulatory requirements would still apply across jurisdictions, meaning one universal identity credential is unlikely to resolve every compliance issue.
Bank backing does not guarantee stablecoin adoption Waseem Salim, CEO of Valdora, told crypto.news that an established issuer can provide initial trust, but utility determines whether people continue to hold and use a stablecoin.
Société Générale offers an example of the difference between institutional backing and circulation. Its digital asset subsidiary launched USD CoinVertible on Ethereum and Solana in 2025. Despite its connection to a major global bank, official SG-FORGE data showed approximately $12.55 million of the stablecoin in circulation as of Sept. 4.
“A strong name helps, but people won’t adopt a stablecoin just because there’s a bank behind it,” Salim said. “They need a reason to actually use and hold it.”
According to Salim, users will consider whether the token works with their existing wallets and preferred networks, whether sufficient liquidity is available, and how easily they can redeem it. They will also examine what they can do after acquiring it.
Possible advantages include cheaper cross-border settlement, direct integration with corporate bank accounts, and access to tokenized financial products. Those benefits would need to be substantial enough to compete with USDT and USDC integrations and the familiarity of conventional deposits.
Kan similarly described adoption as utility-driven. Institutional reputation could attract users who value regulated redemption and established banking relationships, but the token would need to work across payments, swaps, merchant transactions and local cash-out services.
The last step could prove decisive. A stablecoin may move between blockchains within seconds, but Kan said much of that advantage disappears if recipients face high costs when converting it into reais, rupees or pesos.
The World Bank’s latest remittance pricing data puts the average cost of sending money internationally at 6.36% of the transferred amount. Bank-backed stablecoins could compete in those corridors if they reduce the complete delivered cost, including foreign-exchange spreads, network fees, redemption charges and local payout expenses.
Domestic conditions will also affect adoption. Kan said stablecoins must offer more than fast local transfers in markets already served by systems such as India’s UPI, Brazil’s Pix and SEPA Instant in Europe. Their stronger use cases in those regions may involve international commerce, multi-currency access and digital-asset settlement.
Reserves, redemption and liability will test trust The consortium’s size creates another question: which entity will ultimately stand behind the token?
David said businesses should not have to determine which of the 21 participating institutions is responsible when a redemption fails. He called for one clearly identified legal issuer, segregated and independently verified reserves, and defined obligations for the issuer, participating institutions, and infrastructure providers.
“Shared distribution is an advantage. Shared liability is not,” David said.
The consortium has said it intends to comply with the US GENIUS Act and the EU’s Markets in Crypto-Assets framework where applicable. The GENIUS Act established requirements covering one-to-one reserves, disclosures, redemption, and permitted issuers, although US regulators were still completing implementation rules during 2026.
Kan said wallets would also require information about freezing powers, transfer restrictions, sanctions enforcement, and how compliance responsibilities are divided among the issuer, wallet, and fiat service providers. Such controls become more complex when tokens circulate across public blockchains and national borders.
Redemption risks could grow if the stablecoin becomes a gateway into tokenized investments. Salim warned that users must understand that yield does not appear merely because an asset is held onchain.
If returns come from business lending, government securities, or market strategies, platforms should identify the underlying source, asset manager, custodian, and counterparties. They should also explain how quickly the assets can be sold and what happens if a borrower defaults.
Salim said those arrangements differ from interest earned on a bank deposit because the legal relationship, custody model, liquidity, and protections may not be the same.
Platforms could also create a mismatch if users expect immediate stablecoin withdrawals while the underlying capital is invested in assets that trade during limited hours or take longer to sell. Salim said providers may need liquid reserves, staggered maturities, redemption windows, or withdrawal queues aligned with the underlying assets.
USDT and USDC may face competition as the market expands Ahuja expects a bank-issued dollar stablecoin to place more immediate pressure on USDC in institutional markets where Circle and major banks could compete for the same corporate balances.
If companies transfer balances into the new stablecoin, the reserves and income generated from those assets would move with them. However, Ahuja said USDT occupies a different position because much of its demand comes from markets where access to US banking services remains limited or inefficient.
The consortium’s Western banking relationships would not automatically replicate Tether’s reach in those regions. USDT is widely used on exchanges and in markets where people seek access to dollars outside conventional banking channels.
Competition may also enlarge the market rather than redistribute a fixed amount of stablecoin activity. Banks could bring corporate transactions onchain that currently do not use USDT, USDC, or any public blockchain.
Ahuja said Tether and Circle could therefore lose percentage share while their circulation and transaction volumes continue growing. He recommended examining the composition of stablecoin activity rather than relying solely on market-share figures.
The effects could extend beyond the issuers. A market containing bank stablecoins, tokenized deposits, USDT, USDC, and tokens tied to other currencies would increase demand for companies connecting those pools.
Ahuja identified liquidity providers, payment infrastructure, custody services, compliance tools, and blockchain networks as potential beneficiaries. Tokenized-asset platforms could also gain if regulated digital cash allows funds and securities to settle on the same infrastructure.
David said the consortium’s traction should ultimately be measured through active business users, recurring settlement, redemption performance during market stress, and acceptance outside the 21 participating institutions. Large transaction volumes alone could reflect a small group of members moving capital among themselves.
The consortium’s banking relationships could put its token in front of corporate users quickly. The four executives nevertheless agreed that liquidity, interoperability and external acceptance, not the number of institutions behind it, will determine whether the stablecoin becomes a genuine rival to USDT and USDC.
Tether has won big again with USDT. The issuer of the market’s first stablecoin reports a net operating profit of 1.3 billion dollars in the second quarter of 2026. Its excess reserves now reach 5.2 billion. U.S. Treasury bonds remain at the heart of its revenues.
In brief Tether earns 1.3 billion dollars in the second quarter. USDT’s excess reserves reach 5.2 billion. U.S. Treasury bonds still hold a central place in the reserves. USDT generates another 1.3 billion for Tether Tether continues to accumulate profits. In 2025, the group had already exceeded 10 billion dollars in profits. The second quarter of 2026 adds 1.3 billion dollars in net operating profit. The figure comes from the new reserves attestation.
USDT remains the cornerstone. Each token in circulation must be backed by assets held by Tether. A large part of these reserves is held in highly liquid instruments, notably short-term U.S. debt.
These investments generate interest. Tether keeps it. With the current size of USDT, the result rises quickly. The stablecoin is still used on exchanges, in DeFi, for payments, or simply as a digital dollar between two crypto transactions. The larger the supply grows, the more reserves also grow. And the revenues along with them.
U.S. Treasury bonds continue to pay off Tether has held a significant amount of U.S. Treasury bonds for several years. This exposure has become one of its main sources of income. The group directly benefits from still-high rates in the United States.
Users hold USDT. Tether places the reserves. The interest stays within the company. The weight taken by stablecoins is now beginning to far exceed the crypto market alone. Cointribune recently looked back at their growing role in financing U.S. debt.
Tether finds itself in the middle of this evolution. The group does not only depend on a rising Bitcoin or a favorable altcoin season. Its reserves already generate income. The quarter shows it again. 1.3 billion dollars. Not thanks to a new token. Not thanks to a spectacular market rise. Mainly thanks to the assets supporting USDT.
Tether maintains a 5.2 billion margin The other important figure of the report reaches 5.2 billion dollars. It concerns excess reserves. In other words, Tether claims to hold 5.2 billion dollars of assets more than the amount required to cover the USDT in circulation.
This cushion is therefore added to the coverage of the tokens. It can absorb a drop in some assets or other expenses without directly touching the reserves supposed to support USDT. The group remains closely watched. Tether’s size attracts regulators, banks, and governments. USDT now circulates well beyond traditional crypto platforms.
International payments. Emerging markets. Dollar savings. Trading. U.S. regulation must also be reinforced in the coming months. Tether will have to deal with a much more precise framework for stablecoins, notably with the GENIUS law preparing new rules for issuers of digital dollars like USDT.
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Evans S.
Fascinated by Bitcoin since 2017, Evariste has continuously researched the subject. While his initial interest was in trading, he now actively seeks to understand all advances centered on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the sector as a whole.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.
Disclosure. PANews may publish sponsored content, partner content, advertisements, affiliate links, event promotions, and market commentary involving Web3 projects, service providers, or financial products. PANews personnel, contributors, or affiliates may hold digital assets or other interests related to covered topics. See our Terms of Service.
Thai businessmen sue Tether for freezing $42M in $61M pig butchering caseTwo Thai businessmen have sued stablecoin issuer Tether in a New York district court, claiming it illegally froze $42.4 million in Tether USDt (USDT) in October, as part of a broader case tied to a pig butchering scheme.
The plaintiffs claimed that Tether illegally froze the $42 million without a warrant in October 2025, following an informal request from US Homeland Security Investigations.
Authorities in the Eastern District of North Carolina only issued a seizure warrant for the funds later in February 2026. The warrant directed the burn and reissuance of the tokens to a government wallet.
While the plaintiffs didn’t dispute their involvement in the investment scam, the lawsuit tests the freezing authority of stablecoin issuers.
Thailand adopts crypto Travel Rule with self-custodial wallet checksThailand is tightening oversight of crypto transfers, including transactions involving self-custodial wallets, as it moves to align with global Anti-Money Laundering (AML) standards.
Thailand’s Securities and Exchange Commission (SEC) issued new Travel Rule regulations requiring digital asset operators to collect information about parties involved in crypto transfer.
The rules will take effect on Feb. 27, 2027.
Thailand SEC proposes retail access to regulated overseas crypto derivativesThailand’s Securities and Exchange Commission (SEC) has proposed allowing intermediaries to facilitate retail access to certain digital asset derivatives traded overseas.
Under the proposal, eligible products would need to resemble crypto derivatives traded in Thailand, including their underlying assets, maturity, leverage and settlement methods.
The products must also trade on an exchange that uses a central counterparty for clearing and is overseen by a regulator belonging to specified international regulatory or exchange groups.
The consultation remains open until Sept. 30.
ASIA
Pencil Finance completes $1M onchain lending cycle for 6.6K students in Southeast AsiaPencil Finance has completed a $1 million onchain student loan cycle, offering financing to 6,600 students in Southeast Asia who were underserved by traditional lenders.
Of the 6,600 students across 118 schools and universities in Southeast Asia, about 1,050 received direct funding. Pencil said the loans were designed for students underserved by traditional lenders, with 50% female borrowers and 93% stemming from lower-income households.
Pencil Finance claims this is the first-ever fully onchain lending cycle financing student loans transparently recorded on the blockchain network.
Asia crypto custody deals from Ripple and CoincheckRipple has partnered with digital asset infrastructure company SettleMint to offer financial institutions solutions for custody, issuance and management of tokenized assets across their full lifecycle.
Digital asset service provider Coincheck Group has also partnered with wallet infrastructure provider DFNS to build digital asset wallet technology and custody services in Japan.
SINGAPORE
Singapore weighs recognizing some foreign-issued stablecoinsThe Monetary Authority of Singapore (MAS) is reconsidering its earlier restriction on stablecoins issued across multiple jurisdictions, proposing a route for some jointly issued tokens to qualify under its regulatory framework.
Under one proposal, stablecoins jointly issued by a Singapore issuer and a foreign issuer could be regulated under the framework and labeled “MAS-regulated stablecoins,” provided that the associated risks are sufficiently mitigated.
MAS is also considering recognizing a limited number of foreign-issued stablecoins regulated under comparable overseas frameworks, citing their potential use in cross-border wholesale transactions.
AUSTRALIA
Australia warns unlicensed crypto firms of fines up to 10% of annual turnoverAustralian crypto companies relying on temporary regulatory relief have until Sept. 30 to apply for a financial services license or risk penalties, including fines reaching 10% of their annual turnover.
The Australian Securities and Investments Commission (ASIC) said businesses requiring an Australian Financial Services license must apply for one or seek changes to an existing license before the deadline.
ASIC has recorded more than 45 digital asset-related license applications to date.
UAE
Standard Chartered launches spot Bitcoin and Ether trading in UAELondon-headquartered multinational bank Standard Chartered has launched spot Bitcoin and Ether trading for institutional clients in the United Arab Emirates (UAE).
The move makes Standard Chartered the first global bank to offer institutional digital asset trading in the region and the first Global Systemically Important Bank (G-SIB) with a similar offering, the bank said.
JAPAN
Japan’s Remixpoint dumps altcoinsRemixpoint, one of Japan’s largest corporate Bitcoin holders, sold all its altcoins, leaving about 1,506 BTC ($115 million) as its only cryptocurrency holding as it concentrates its crypto strategy around Bitcoin.
Remixpoint sold its Ether, Solana, XRP and Dogecoin holdings for a combined 878.8 million yen ($5.5 million), generating a 117.8 million yen ($736,000) gain, according to a Wednesday company disclosure.
The company recorded gains on its ETH, SOL and XRP sales but sold its DOGE holdings at a 3.26 million yen ($20,000) loss.
Japanese regulator seeks stablecoin tax exemptionJapan’s Financial Services Agency (FSA) submitted a request to exempt trust-type stablecoins from mandatory tax filings starting in fiscal year 2027.
Metaplanet moves 4,800 BTC worth $377M to CoinbaseThe Japanese Bitcoin treasury company has transferred 10,270 BTC to Coinbase Prime this week, triggering speculation about the company selling its holdings.
Japan’s FSA Warns Hong Kong-Based IZAKA-YA Over Unregistered ServicesJapan’s Financial Services Agency issued a formal warning to Hong Kong-based Izakaya Limited, alleging its cryptocurrency exchange services are unregistered.
SBI Holdings Takes 20% Stake in Indonesia’s Ajaib GroupJapan’s SBI Holdings will spend $270 million to acquire a 20% stake in Indonesian online brokerage Ajaib Group. The aim is to expand its crypto business across the region and to promote SBI’s yen stablecoin JPYSC.
HONG KONG
Hashkey joins DTCC working group as first Asian crypto service providerHashkey joined the Depository Trust & Clearing Corporation’s (DTCC) Digital Assets Advisory Services Industry Working Group as its first Asian digital asset service provider.
Hashkey joins over 100 other global financial institutions including JPMorgan Chase, Goldman Sachs, Nasdaq and the New York Stock Exchange.
DTCC custodies $114 trillion in liquid assets, including stocks and exchange-traded funds. Its working group was formed to connect traditional finance with decentralized finance (DeFi) infrastructure. DTCC plans to launch access to tokenized securities in October.
Bitcoin Asia conference ‘subdued’The mood at Bitcoin Asia in Hong Kong was subdued according to the South China Morning Post.
Despite a pep talk by Binance founder Changpeng Zhao who declared Bitcoin “will for sure become more important than gold” the bear market hangover was all too evident.
“Psychologically, I think this has been one of the hardest bear markets we’ve had, because this time it wasn’t just the price of bitcoin that took a hit,” said Brandon Green, CEO of conference organiser BTC, during his opening address.
“This time, the Bitcoiners’ ego also took a hit.”
OSL Group Reports 65.8% Revenue SurgeHong Kong-based digital asset firm OSL Group reported a 65.8% revenue increase in its first-half financial results.
SFC warns Star Bridge Capital is unlicensedHong Kong’s Securities and Futures Commission has added Star Bridge Capital Group to its Alert List following forced liquidation anomalies and millions in trader losses.
KOREA
Mirae Asset lays out crypto, stablecoin, tokenization plans for Digital XSouth Korean financial group Mirae Asset plans to build a 150 trillion won ($109 billion) digital asset business around Digital X, the crypto exchange formerly known as Korbit, according to The Korea Times.
The report said Digital X will focus on crypto, stablecoins, real-world assets and security token offerings, with plans to tokenize physical assets including gold, silver and electricity.
The expansion plans follow Mirae Asset Consulting’s acquisition of a 97.15% stake in Korbit in July for a cumulative 141.4 billion won. The exchange was subsequently rebranded as Digital X, marking the first time an affiliate of a South Korean financial group acquired control of a domestic crypto exchange.
Cointelegraph publishes long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Some articles contain affiliate links, from which Cointelegraph may earn a commission. These relationships do not influence which products we review or our editorial conclusions. Content published in here does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence.
Two Thai businessmen are suing Tether in Manhattan federal court over 42,417,785.62 USDT blacklisted across 10 Ethereum addresses. Onchain records show all 10 were frozen in a single two-and-a-half-minute batch on Oct. 30, 2025, and the seizure warrant the complaint cites is dated Feb. 19, 2026.
Two Thai businessmen have sued Tether over 42,417,785.62 USDT the stablecoin issuer blacklisted across 10 Ethereum addresses, according to a complaint filed in the Southern District of New York on Aug. 31 and re-filed the following day. Onchain records show the addresses were frozen on Oct. 30, 2025. The seizure warrant the complaint cites is dated Feb. 19, 2026.
Tether's terms of service describe the right to buy and redeem tokens as "a contractual right personal to you," and reserve the right to freeze tokens "as required by applicable Law or where Tether, in its sole discretion, determines it is prudent to do so." Plaintiffs Nutthawat Rukthammachalern and Natthawat Kasamvilas say they bought their USDT on the secondary market and have no contract with Tether at all.
Ten Addresses, Two And A Half MinutesQueries against the USDT contract return true for all 10 addresses named in the complaint. Historical state puts the flip for every one of them on Oct. 30, 2025, between 23:00:35 and 23:03:11 UTC — a single batch inside two and a half minutes. Their combined balance at that block was 42,417,785.617689 USDT, which matches the figure in the complaint to the cent. The largest single address, attributed to Kasamvilas, holds 26.1 million USDT.
The two functions the complaint describes are in the verified contract source. The first, addBlackList, blocks outbound transfers while leaving the address able to receive; the 10 addresses have taken in about 101 USDT since the freeze. The second, destroyBlackFunds, zeroes a blacklisted balance and decrements total supply.
The complaint pleads five counts: declaratory judgment on the scope of federal seizure process, conversion, trespass to chattels, unjust enrichment in the alternative, and further declaratory and injunctive relief. It names four defendants — Tether Holdings, Tether International, Tether Operations and Tether Investments, all S.A. de C.V. entities following the group's 2025 move to El Salvador. Judge Lewis J. Liman has the case. Summonses issued to all four on Sept. 1. Tether has not yet appeared.
What The Warrant Does Not CoverThe complaint alleges, on information and belief, that Tether acted on an "informal request by the U.S. government, acting through the HSI Agent" before any warrant existed, and that a warrant followed on Feb. 19, 2026 — more than three months later. It also alleges Tether emailed Kasamvilas on Nov. 2, 2025, pointing him to a Homeland Security Investigations agent and saying "We do not have further information at this time," without disclosing that Tether had frozen the funds itself.
Plaintiffs filed a Rule 41(g) motion for return of property in the Eastern District of North Carolina on July 31, case 5:26-mc-00026, before Chief Judge Richard E. Myers II. The government was granted an extension to respond on Aug. 21 and the motion is undecided. The complaint states that no civil forfeiture complaint has been filed against these addresses.
Four Billion Frozen So FarTether said in April that its cooperation with law enforcement has frozen more than $4.4 billion in assets, including over $2.1 billion tied to U.S. authorities, across 2,300 cases and 340 agencies in 65 countries. The Defiant covered that disclosure when it was published. In a 2022 post on Tornado Cash, Tether described its trigger as a request rather than a court order: "When Tether receives an applicable/legitimate request from a verified law enforcement agent to freeze a privately held wallet, the Company complies."
Tether called the suit "a baseless attempt to interfere with Tether's important work with global law enforcement, including the Department of Justice, to prevent the unlawful use of USDT" in a statement given to reporters on Sept. 2. The company has published nothing about the case on its own newsroom.
USDT traded at $0.9996 with a market capitalization of $183.3 billion at 7:32 a.m. ET Thursday, the third-largest crypto asset, according to CoinGecko. The 42.4 million USDT at issue is roughly 0.02% of that supply.
Tether reported $1.3 billion in Q2 net operating profit in its latest BDO attestation statement, while excess reserves rose to $5.2 billion above full USDT backing.
The figures keep Tether at the center of the stablecoin market’s profitability and reserve debate. USDT remains the largest dollar stablecoin in crypto, and Tether’s reserve earnings have become one of the most closely watched financial stories in the sector.
The main driver is familiar: interest income from large holdings of U.S. Treasury assets.
But the details still need careful wording. Net operating profit is not the same as total reserves, and excess reserves are not the same thing as circulating supply.
For more details, visit the official Tether platform.
TL;DR Tether reported $1.3 billion in Q2 net operating profit. Its latest attestation showed $5.2 billion in excess reserves. The figures are separate from total USDT circulating supply and full reserve backing. Why Tether Is So Profitable Tether’s business benefits from scale.
When users hold USDT, Tether holds reserve assets backing those tokens. A large portion of those reserves is held in short-term U.S. Treasury instruments and similar cash-equivalent assets. In a higher-rate environment, those holdings can generate substantial income.
That is why stablecoin issuers have become major financial businesses.
They may issue digital dollars, but their economics can look like a huge cash-management operation. The larger the token supply, the larger the reserve portfolio, and the more interest income can be generated when yields are favorable.
Tether’s $1.3 billion quarterly profit reflects that model.
Excess Reserves Add A Cushion The reported $5.2 billion in excess reserves is also important.
Stablecoin users want to know not only that tokens are fully backed, but that the issuer has a cushion above liabilities. Excess reserves can help absorb shocks, operational costs, or asset fluctuations.
That does not remove every risk.
Reserve composition, banking access, liquidity, legal structure, transparency, and redemption mechanics still matter. But a larger reserve cushion can strengthen market confidence.
For USDT, that confidence is critical because the token is deeply embedded in global crypto trading.
USDT’s Market Role Is Huge USDT is used across exchanges, DeFi, payments, emerging-market dollar access, trading pairs, and liquidity venues.
That means Tether’s financial health matters beyond Tether itself. If confidence in USDT weakens, the impact can spread through crypto markets quickly. If confidence remains strong, USDT continues to serve as one of the industry’s main settlement assets.
That is why every attestation receives attention.
It is not just an accounting update. It is a health check for one of crypto’s biggest liquidity layers.
Attestations Are Still Point-In-Time The market should keep the limits in mind.
An attestation is a snapshot. It is not a live, second-by-second view of reserves. It does not eliminate every question around asset composition or risk. It also does not give the same kind of continuous visibility as an on-chain reserve dashboard.
But regular attestations still improve transparency compared with no disclosure at all.
They give users and institutions data to assess reserve backing, profit, and excess cushion at the reporting date.
The Stablecoin Race Is Getting Bigger Tether’s profit also shows why stablecoins have become strategically important.
Banks, fintechs, payment firms, and crypto companies all want a role in digital dollar settlement. Regulation is tightening, competition is growing, and reserve economics are attractive.
Tether already has scale.
The question is how it holds that lead as regulated stablecoin frameworks, tokenized deposits, and bank-linked digital money products develop.
For now, the latest attestation shows a highly profitable issuer with a large reserve cushion and a stablecoin that remains central to crypto liquidity.
This article draws on Tether’s Q2 2026 BDO attestation materials.
This article was written by the News Desk and edited by Samuel Rae.
Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.
Disclosure. PANews may publish sponsored content, partner content, advertisements, affiliate links, event promotions, and market commentary involving Web3 projects, service providers, or financial products. PANews personnel, contributors, or affiliates may hold digital assets or other interests related to covered topics. See our Terms of Service.
Two Thai businessmen are suing Tether for freezing their USDT holdings worth tens of millions of dollars based solely on an informal US government request without any warrant or legal authority.
The complaint filed in federal court details how the stablecoin issuer targeted their Ethereum (ETH) addresses using its blacklist capability.
The plaintiffs had no contract or relationship with Tether.
“On October 30, 2025, Defendants used that power against Plaintiffs —strangers to Defendants, with whom Defendants have no contract and no relationship of any kind —freezing tens of millions of dollars of Plaintiffs’ USDT contained in Plaintiffs’ blockchain addresses at the informal request of a U.S. government agent, without any warrant, order, or legal process of any kind directed to Defendants, and without notice to Plaintiffs.”
A seizure warrant came more than three months later on February 19th, 2026, seeking to destroy the frozen USDT and reissue it to a government wallet.
The filing argues that Tether lacks legal possession or control over the assets and has no authority to maintain the freeze, which continues nine months later while the company profits from retaining reserves tied to the tokens.
Tether controls an on-chain blacklist via its addBlackList function, allowing freezes without court orders while investigations proceed, says a technical analysis.
“No court order is required for the freeze itself. Tether can freeze pre-emptively while an investigation is ongoing,” the analysis notes.
The Thai businessman is asking the court for restitution and disgorgement of all interest, yield, income, profits, and other benefits derived from the reserves attributable to the USDT in the addresses during the freeze period, and to impose a constructive trust over those amounts.
A High-Stakes FreezeRipple CTO emeritus David Schwartz (@JoelKatz) has publicly backed Tether after the stablecoin issuer was sued over the pre-warrant freezing of $42.4 million in $USDT. The case, filed in the U.S. District Court for the Southern District of New York, was brought by two Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas, who allege Tether unlawfully blocked access to their funds.
The plaintiffs allege that Tether blacklisted 10 Ethereum addresses containing 42,417,785.62 USDT on October 30, 2025, following an informal request from U.S. Homeland Security Investigations (HSI). According to the businessmen, Tether took the action without a warrant, court order, or notice to them. An official court order authorizing the seizure was issued only four months later, on February 19, 2026.
Schwartz argued that Tether's response was appropriate given the contested ownership of the assets. "Tether is doing exactly what they're supposed to do when you know you owe money to someone but have a good faith belief you can't be sure who you owe the money to," he wrote. "You hold it safely until a court with jurisdiction over the asset decides."
Fraud Links and a Broader Seizure The funds appear tied to a wider Justice Department investigation involving more than $61 million in USDT that prosecutors said was stolen through so-called pig-butchering scams, in which fake romantic or social relationships are used to extract victims' funds before the proceeds are laundered. On February 19, 2026, a court in the Eastern District of North Carolina issued a warrant directing Tether to burn the frozen USDT and remint the tokens to a government wallet. Five days later, authorities announced a $61 million USDT seizure traced to addresses allegedly linked to laundering proceeds from pig-butchering victims.
The lawsuit does not dispute the government's claim that the funds are connected to scam proceeds. Instead, the plaintiffs have challenged Tether's authority to freeze, burn, and reissue USDT that they say was purchased on the secondary market. They maintain that they acted in good faith and are demanding that the assets be unfrozen, along with compensation for lost profits, including interest income Tether earned from managing the reserves backing those funds.
The outcome of the lawsuit could set a precedent for how far stablecoin issuers may go in acting upon informal government requests before the formal judicial process is completed. The case spotlights the operational dilemma stablecoin issuers face: balancing the threat of civil lawsuits for freezing assets without court approval against potential criminal liabilities from delayed compliance with regulatory warnings. Neither the businessmen's ownership claims nor the government's allegations concerning the disputed USDT have been decided by a court.
Sources:
CoinDesk: Tether Sued Over $42.4 Million USDT Freeze Allegedly Made Months Before U.S. Warrant
CoinTelegraph: Thai Businessmen Sue Tether for Freezing $42M in $61M Pig Butchering Case
U.Today: Ripple's David Schwartz Defends Tether's $42 Million Pig-Butchering Freeze in Landmark Suit
Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.
Disclosure. PANews may publish sponsored content, partner content, advertisements, affiliate links, event promotions, and market commentary involving Web3 projects, service providers, or financial products. PANews personnel, contributors, or affiliates may hold digital assets or other interests related to covered topics. See our Terms of Service.
USDT0 launched on Stellar on Sept. 2, connecting the payments-focused blockchain with Tether-backed liquidity available across networks supported by the cross-chain stablecoin infrastructure.
Summary
USDT0 launched on Stellar using LayerZero’s interoperability standard for cross-chain stablecoin transfers and applications worldwide. Stellar users can access USDT-linked liquidity without relying on separately fragmented token pools across networks. Kraken, Bitget, Fireblocks, Freighter, Lobstr and SushiSwap supported USDT0 when Stellar announced the launch publicly. Stellar reported $5.5 billion quarterly stablecoin payment volume, up 72% year over year in 2026. USDT0 extends Tether-backed liquidity through separate interoperability infrastructure rather than isolated cross-chain token pools globally. The integration uses LayerZero’s Omnichain Fungible Token standard. It allows USDT0 to move between Stellar and connected blockchains while maintaining what its developers describe as a unified supply backed one-to-one by USDT.
USDT0 is different from a new direct issuance of USDT by Tether on Stellar. It is an interoperability product that extends access to USDT liquidity across supported networks. The distinction matters because the reported $180 billion represents USDT’s broader market capitalization, not the quantity of USDT0 deposited on Stellar at launch.
The Stellar Development Foundation said the asset could support payments, treasury transfers, trading and decentralized finance. Actual adoption will depend on the amount bridged to Stellar and the number of businesses and users integrating it.
USDT0 connects Stellar with a multichain supply Stablecoins transferred through conventional bridges can become separate representations backed by assets locked on another blockchain. Liquidity may consequently become divided between different bridge providers and token contracts.
USDT0 aims to reduce this fragmentation through LayerZero’s interoperability technology. Its documentation says participating networks retain redeemable assets on both sides of a transfer while gaining connectivity with other USDT0-supported chains.
When USDT0 moves between networks, the system updates supply across the relevant chains instead of creating an unrelated wrapped token. The Stellar Development Foundation said this structure gives participants access to the broader liquidity pool shared by connected ecosystems.
That description does not eliminate cross-chain risks. Users remain exposed to the contracts, messaging infrastructure and operational controls that manage transfers. Access to a larger market also does not guarantee deep liquidity on every decentralized exchange or trading pair.
The official USDT0 website lists more than 25 supported networks, including Ethereum, Solana, Arbitrum, Avalanche, Polygon, TON, Optimism, Hyperliquid and Stellar.
Stellar targets payments in USDT-dominant markets Stellar was designed to support asset issuance and international payments. Its network charges transaction fees in XLM and normally confirms transactions within several seconds.
The foundation said USDT0 could help payment companies serve users in Latin America, Africa and Asia-Pacific, where USDT is widely used for dollar-denominated transfers, savings and settlement.
Stellar reported $5.5 billion in stablecoin payment volume during the first quarter of 2026, representing a 72% increase from the same period a year earlier. It also said tokenized real-world assets on the network surpassed $2 billion shortly after the quarter ended.
Those figures come from the Stellar Development Foundation and measure activity across the wider ecosystem. They do not represent USDT0 activity, because the asset had not launched on Stellar during that reporting period.
Stellar already supports stablecoin and tokenized-asset projects including Circle’s USDC and Franklin Templeton’s BENJI. MoneyGram also introduced MGUSD on the network in June, adding another dollar-denominated asset to its payment infrastructure.
USDT0 therefore enters an ecosystem containing competing stablecoins. Its potential advantage is access to markets where users and counterparties already prefer USDT. USDC and other assets may retain stronger liquidity in individual Stellar applications or regulated payment services.
Exchanges and wallets support the USDT0 launch USDT0 became available through Kraken, Bitget, Fireblocks, Freighter, Lobstr, Meru, BiLira Kripto, Kredete, Ramp Network and SushiSwap, according to Stellar’s announcement.
Exodus was listed as an upcoming integration. The foundation said additional wallets and exchanges would add support in the following months, although it did not provide deployment dates.
SushiSwap gives Stellar users an initial decentralized trading venue for USDT0. Future lending and collateral uses will depend on separate integrations by protocols and their assessment of liquidity, pricing and cross-chain risks.
Exchanges must also distinguish between USDT0 and USDT deposits. Sending assets through an unsupported network or to an incompatible token contract can result in delayed credits or lost funds. Users must confirm the supported asset and blockchain before initiating transfers.
The launch follows wider growth in interoperable stablecoins. In related coverage, RLUSD expanded across five additional networks through Wormhole’s native transfer system, reflecting demand for stablecoins that can move across several ecosystems without isolated wrapped versions.
Stellar adoption depends on liquidity deployed locally The launch gives Stellar applications technical access to USDT0, but it does not establish how much liquidity will remain on the network. That will depend on deposits, exchange support, market-maker activity and demand for USDT-denominated payments.
The claim that Stellar users can access more than $180 billion should therefore be read as a reference to the broader USDT market. It does not mean $180 billion is available for immediate trading, lending or withdrawal through Stellar.
The network’s low fees may support smaller payments and remittances, while its existing on-ramp and off-ramp relationships could help USDT0 reach users outside crypto trading markets. Each service remains subject to its own jurisdictional, compliance and customer-access requirements.
XLM is required to pay Stellar transaction fees and maintain minimum account balances. However, USDT0 adoption would not automatically create large XLM demand because individual network fees are small.
No verified XLM market reaction could be attributed solely to the launch. Cryptocurrency prices respond to wider market movements, liquidity conditions and investor positioning alongside network announcements.
The next measurable developments will be USDT0 supply on Stellar, transfer volume, exchange deposits and withdrawals, decentralized exchange liquidity and additional payment-provider integrations. These figures will show whether the launch produces sustained activity rather than technical availability alone.
Stellar has not announced a target for USDT0 supply or payment volume. The foundation also has not provided a deadline for the additional integrations mentioned in its release.
Offline, on-device translation for underserved communitiesStablecoin issuer @Tether has released a family of open-source neural machine translation models designed to run entirely offline on phones and laptops, covering 19 African languages spoken by roughly half the continent's population. A companion release, TranslatePsy-EuroNano, extends the same technology to nine European languages.
The model family is called TranslatePsy-AfriSLM. Crucially, That design choice reflects a deliberate push for privacy and accessibility in regions where cloud infrastructure is limited.
Health, education, and farming among target usesTether says the translation models are intended to pair with its existing medical AI model, enabling health information to be delivered in local languages. Education content and farming guidance are also listed as target applications. All models are free to download.
The AI push appears to extend that footprint beyond finance.
The research underpinning the release has been accepted at the EMNLP 2026 conference.
The broader challenge is significant. Tether's release is a targeted attempt to close part of that gap.
Sources:
Crypto Briefing: Tether releases open-source AI translation models for African and European languages
Tether official website: TranslatePsy-AfriSLM announcement
arXiv: AfriNLLB, research on efficient translation models for African languages
A pending lawsuit in the Southern District of New York challenges the legality of Tether's asset-freezing practices, centering on the timeline between informal requests and formal judicial warrants.
On October 30, 2025, Tether blacklisted 10 Ethereum addresses holding over 42.4 million USDT. The mechanism was standard: an execution of the smart contract‘s addBlackList function. The legal justification, however, arrived significantly later. It was not until February 19, 2026, that a magistrate judge in the Eastern District of North Carolina issued a seizure warrant. That four-month interval between the initial freeze and the formal judicial authorization serves as the primary friction point in Rukthammachalern & Kasamvilas v. Tether, a case filed in the Southern District of New York on August 31, 2026.
The plaintiffs, two Thai businessmen, allege that Tether acted solely on an informal request from a Homeland Security Investigations agent. They contend that at the time of the freeze, there was no warrant, subpoena, or court order in place. The plaintiffs emphasize that they had no direct customer relationship with Tether, having acquired the tokens through secondary-market transactions. They are now seeking the removal of the blacklist, an injunction against the burning of their tokens—a process Tether can initiate via its destroyBlackFunds function—and damages for the loss of use of their assets.
Section 2(16) of the GENIUS Act defines a ‘lawful order’ as one issued by a court of competent jurisdiction or an authorized federal agency, specifying accounts with reasonable particularity and subject to judicial or administrative review. The plaintiffs argue that an informal request from law enforcement fails to meet these criteria. If the court determines that informal requests fall short of the ‘lawful order’ threshold, the industry’s current model of ‘cooperative’ freezing could face significant regulatory headwinds.
Tether’s scale of intervention is substantial. According to data from BlockSec, the issuer has frozen over $4.2 billion in cumulative assets across more than 4,000 addresses. In 2025 alone, $1.26 billion was frozen. For secondary-market participants, the disposition of these funds is particularly relevant: 55.6% of the frozen total, or roughly $698.42 million, has been destroyed. With only a 3.6% unfreeze rate, the stakes for holders caught in these blacklists are high.
The legal question remains whether a private issuer possesses the discretion to freeze tokens based on informal requests, and whether a subsequent warrant can retroactively validate an action taken months prior. Tether has not yet provided a public response to the allegations. Meanwhile, the plaintiffs have initiated a parallel return-of-property application in North Carolina, filed on July 31, 2026, which remains pending alongside the SDNY case.
For DeFi builders and institutional participants, the case highlights the tension between the technological capability to freeze assets and the legal mandate to do so. Section 4(a)(6)(B) of the GENIUS Act requires issuers to have the capability to comply with lawful orders, but it does not explicitly grant them the authority to act as an arm of law enforcement in the absence of one. As the proceedings move forward, the court’s interpretation of these definitions will likely dictate whether the ‘issuer-as-gatekeeper’ model remains a flexible tool for law enforcement or becomes a strictly defined, court-sanctioned process.
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David Schwartz, Chief Technology Officer at Ripple, publicly supported Tether’s decision to freeze $42.4 million in USDT assets prior to the receipt of a formal court warrant. The move has intensified debate over the extent of centralized control maintained by stablecoin issuers.
Lawsuit targets Tether’s asset freezeTwo Thai businessmen initiated legal action against Tether in the Southern District of New York on August 31. They allege the company blacklisted 10 Ethereum addresses containing 42,417,785.62 USDT on October 30, 2025, after being contacted by Homeland Security Investigations in an informal capacity. A formal seizure warrant for the funds only followed on February 19, 2026. The case remains unresolved in court.
Schwartz stated that Tether had limited options in the situation, emphasizing that securing the disputed funds was necessary until competing ownership concerns could be resolved. His defense is notable given Ripple’s position as an issuer of RLUSD, a rival regulated stablecoin.
Stablecoin controls and compliance powerRipple outlines in its RLUSD terms that it reserves broad powers to freeze wallet addresses holding RLUSD in response to legal requirements or under internal compliance policies, including informal law enforcement requests. The protocol also permits RLUSD to be destroyed in one wallet and recreated in another as appropriate.
This approach reveals why Schwartz’s backing of Tether’s pre-emptive action appears consistent with Ripple’s own stance on regulatory compliance.
Both RLUSD and USDT are issuer-managed stablecoins. Their design allows administrative actions such as address freezing, burning, or reminting backed tokens, enabling compliance during fraud investigations, sanction enforcement, and court-ordered asset seizures.
Mini dictionary: RLUSD is Ripple’s regulated US dollar-backed stablecoin, featuring built-in controls for address freezing and reminting to meet compliance and law enforcement requests.
Ripple affirms that RLUSD wallets can be blacklisted and tokens burned or reissued if legally required or for compliance purposes, mirroring measures seen at Tether.
XRP and native asset distinctionsIn contrast, Schwartz has repeatedly clarified that XRP, the native asset of the XRP Ledger, is not subject to these issuer-level controls. Documentation for XRPL distinguishes between issued tokens, which can be frozen or clawed back, and XRP itself, which remains outside such mechanisms.
According to Schwartz, Ripple can neither freeze an account holding XRP nor reverse a finalized XRP transaction. This design underscores the difference between decentralized protocols like XRP and managed stablecoins such as RLUSD or USDT.
As a result, RLUSD and XRP fulfill fundamentally different roles in the digital asset landscape and should not be considered interchangeable.
Tether’s cooperation with authorities expandsTether has recently expanded its cooperation with law enforcement. In February, Tether assisted U.S. authorities in seizing nearly $61 million in USDT related to a pig-butchering fraud operation. The company also reported helping freeze another $344 million in April in coordination with U.S. agencies.
DateAmount Seized/FrozenContextFebruary 2026$61 millionPig-butchering fraud caseApril 2026$344 millionUS law enforcement coordinationThe outcome of the ongoing lawsuit could set a precedent for how far stablecoin issuers may go in acting upon informal government requests before the formal judicial process is completed.
Schwartz’s position highlights the critical division between stablecoins, which require administrative controls to facilitate compliance, and decentralized assets like XRP, which cannot be censored or reversed post-settlement.
Colombian fintech Plenti raised $3 million in seed funding led by Tether to accelerate its expansion across Latin America, with Peru and Bolivia next on its roadmap. Verda Ventures joined the round.
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Founded in 2022, Plenti competes in the multicurrency and retail investment space with platforms including ARQ, Littio and Bitso. Its app lets users hold and move dollars, euros and Colombian pesos, earn yield on balances, fund international brokerage accounts and invest fractionally in US stocks, ETFs, digital gold and crypto.
Plenti said the capital will support its existing Colombian operations while funding its entry into the two new markets. The company now serves more than 150,000 active users and processes over $3.1 billion in annual transaction volume across B2B and B2C services.
The investment reflects growing interest in digital dollar products as consumers and businesses across the region seek alternatives amid local currency volatility. Tether had roughly $184.6 billion of USDT outstanding at the end of June, representing more than 60% of the worldwide stablecoin market.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.
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Bitcoin ETFs posted a net inflow of $101 million yesterday, while Ethereum ETFs saw a net outflow of $48.2 million.
According to monitoring by Farside Investors, U.S. spot Bitcoin ETFs saw a net inflow of $101 million yesterday. Of that, BlackRock’s IBIT recorded a net inflow of $115.4 million, while Grayscale’s GBTC posted a net outflow of $56.2 million. U.S. spot Ethereum ETFs overall had a net outflow of $48.2 million. Among them, BlackRock’s ETHA saw a net outflow of $53.4 million, ETHB posted a net inflow of $52.9 million, Fidelity’s FETH had a net outflow of $26.2 million, and ETHE recorded a net outflow of $23.5 million.
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Is Kimi's $50 billion valuation overpriced? Its annual recurring revenue (ARR) exceeds $1.2 billion, matching that of Zhipu AI, and stands at nearly $2.5 billion, approaching MiniMax.
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Bitget has launched USDT-margined CP perpetual contracts.
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Ethereum L2 network Silicon will cease operations, users are advised to withdraw their assets as soon as possible.
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Tether’s USDT ecosystem has expanded to Stellar. This gives users on the payments-focused blockchain access to more than $180 billion in USDT liquidity through USDT0.
USDT0 will now connect Stellar to Tether’s broader stablecoin liquidity. The integration uses LayerZero’s OFT interoperability standard.
Stellar was originally designed around moving digital assets and cross-border payments.
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The foundation has placed a huge focus on stablecoins, tokenized real-world assets and institutional infrastructure. These have become the key drivers of network activity.
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There have been several stablecoins initiatives spearheaded by Stellar this year. In June, for instance, MoneyGram launched MGUSD, a dollar-denominated stablecoin built on Stellar.
Stellar's rather formidable ecosystem includes Circle’s USDC, Franklin Templeton’s BENJI and other stablecoin and asset-issuance projects.
Expanding liquidity stack Stellar said stablecoin payment volume reached $5.5 billion in the first quarter of 2026, up 72% from a year earlier. At the same time, tokenized real-world assets on the network surpassed $2 billion shortly after the quarter ended.
USDT0 will let Stellar users access the same USDT liquidity available on other connected networks. That could make the network more attractive to exchanges, wallets, and other segments of the industry.
Tether is dominant in many emerging markets, including parts of Latin America, Africa and Asia-Pacific. In these regions, stablecoins are being adopted en masse for savings, remittances and dollar-denominated payments. USDT0 is initially available through wallets, exchanges and applications including Kraken, Freighter, Lobstr, Bitget, Fireblocks, Ramp Network and SushiSwap. Additional integrations are expected to take place in the future.
Two Thai businessmen, Nutthawat Rukthammachalern and Natthawat Kasamvilas, have filed a lawsuit against Tether in the U.S. District Court for the Southern District of New York, seeking the return of approximately 42.4 million USDT that remains frozen on the Ethereum blockchain.
Background to the DisputeTether, known for issuing the largest U.S. dollar-pegged stablecoin, exercised a smart contract function to blacklist ten Ethereum wallets holding a total of 42,417,785.62 USDT on October 30, 2025. The plaintiffs claim this action followed an informal request from a Homeland Security Investigations (HSI) agent, without a legal warrant, court order, or subpoena.
According to Rukthammachalern and Kasamvilas, the freeze became apparent during a failed transaction attempt. When they reached out to Tether about the incident, the company reportedly did not provide details about the legal grounds for the action but instead referred them to an HSI agent’s email.
The plaintiffs maintain they acquired the tokens through lawful secondary market transactions and emphasize that they have never held a direct account with Tether. They argue that Tether’s technical ability to control smart contracts does not equate to lawful ownership or authority over user-held tokens.
Mini dictionary: Tether is the issuer of USDT, the largest stablecoin pegged to the US dollar. It maintains the value of USDT by holding reserves and regularly collaborates with law enforcement in blockchain-based investigations.
Tether applied its smart contract blacklist tool after an HSI request, but Rukthammachalern and Kasamvilas contest that no formal legal procedure supported this freeze at the time.
Seizure Warrant and Ongoing FreezeOn February 19, 2026, a magistrate judge in North Carolina issued a seizure warrant instructing Tether to destroy the USDT held at the flagged addresses and reissue them to a government-controlled wallet. Days later, prosecutors announced the seizure of over $61 million in USDT linked to investment fraud schemes, including so-called pig-butchering scams.
Despite the seizure announcement, the lawsuit notes that the specific 42.4 million USDT associated with the two Thai businessmen had not been moved to a government wallet as of the date the lawsuit was filed. The plaintiffs assert that the subsequent February warrant cannot retroactively legitimize Tether’s initial October freeze.
DateActionAmount (USDT)AuthorityOctober 30, 2025Wallets frozen42,417,785.62HSI (informal request)February 19, 2026Seizure warrant issuedOver 61,000,000Magistrate judgeFebruary 24, 2026USDT seized (total)Over 61,000,000Federal prosecutorsJuly 31, 2026Additional return requestNot specifiedNorth Carolina court Prosecutors identified the wallets as connected to investment fraud schemes and stated that the case began with a tip from a victim, leading investigators to trace funds through multiple addresses intended to obscure their origins.
Legal Arguments and Industry ContextThe plaintiffs are seeking an injunction that would require Tether to remove the blacklist from their wallets, the return of their tokens if they still exist, or compensation for the value of the USDT if they have been destroyed or reissued. They also request damages for any income generated from the frozen funds.
Their central claim questions the legality of stablecoin issuers freezing assets in response to informal law enforcement requests lacking judicial review.
As of September 2, Tether has not issued a public response to the complaint. The lawsuit alleges conversion, trespass to chattels, and unjust enrichment against Tether.
Tether has reportedly frozen substantial sums before, including $514 million across 370 addresses within a single month in early 2026. This pattern has led to broader industry and legal debates about the extent of corporate discretion in freezing or seizing digital assets.
Separately, the plaintiffs told the New York court that they submitted a request in North Carolina on July 31 to recover their funds, but there has not yet been a decision on that application.
Two Thai businessmen sued stablecoin issuer Tether in a New York district court, claiming it illegally froze $42.4 million in Tether USDt (USDT) in October, as part of a broader case tied to a pig butchering scheme.
In a Monday court filing, the plaintiffs claimed that Tether illegally froze the $42 million without a warrant in October 2025, following an informal request from US Homeland Security Investigations.
Authorities in the Eastern District of North Carolina only issued a seizure warrant for the funds later in February 2026, as part of a $61 million pig butchering case. The warrant directed the burn and reissuance of the tokens to a government wallet.
While the plaintiffs didn’t dispute their involvement in the investment scam, the lawsuit tests the freezing authority of stablecoin issuers. It also requests that authorities unfreeze the funds and pay potential punitive damages.
“The complaint is NOT denying that the government claims these coins are scam proceeds. It is saying Tether locked secondary-market holders first, kept earning Treasury yield on the reserves, and only later received a warrant that still does not, in plaintiffs’ view, authorize a private issuer to freeze, burn, or reissue their tokens,” wrote corporate and intellectual property attorney Ariel Givner in a Wednesday X post.
In a separate case in February, a US court sentenced a dual national of China and St. Kitts and Nevis to 20 years in prison for orchestrating a $73 million pig butchering scam.
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
Two Thai businessmen sued stablecoin issuer Tether in a New York district court, claiming it illegally froze $42.4 million in Tether USDt (USDT) in October, as part of a broader case tied to a pig butchering scheme.
In a Monday court filing, the plaintiffs claimed that Tether illegally froze the $42 million without a warrant in October 2025, following an informal request from US Homeland Security Investigations.
Authorities in the Eastern District of North Carolina only issued a seizure warrant for the funds later in February 2026, as part of a $61 million pig butchering case. The warrant directed the burn and reissuance of the tokens to a government wallet.
While the plaintiffs didn’t dispute their involvement in the investment scam, the lawsuit tests the freezing authority of stablecoin issuers. It also requests that authorities unfreeze the funds and pay potential punitive damages.
“The complaint is NOT denying that the government claims these coins are scam proceeds. It is saying Tether locked secondary-market holders first, kept earning Treasury yield on the reserves, and only later received a warrant that still does not, in plaintiffs’ view, authorize a private issuer to freeze, burn, or reissue their tokens,” wrote corporate and intellectual property attorney Ariel Givner in a Wednesday X post.
In a separate case in February, a US court sentenced a dual national of China and St. Kitts and Nevis to 20 years in prison for orchestrating a $73 million pig butchering scam.
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
Tether Releases Open-Source AI Translation Models for African and European Languages
New models run privately and offline on everyday devices, with TranslatePsy-AfriSLM outperforming far larger systems, opening a path to local-language education and health knowledge for underserved communities across Africa; a parallel TranslatePsy-EuroNano release brings the same technology to nine European languages 2 September 2026 – Tether AI Research today announced the launch of new families of open-source AI translation models designed to run directly on smartphones, laptops, and other edge devices with a primary focus on Sub-Saharan Africa. The release includes QVAC TranslatePsy-AfriSLM and QVAC TranslatePsy-AfriNano, supporting 19 and 8 African languages respectively, alongside QVAC TranslatePsy-EuroNano covering 9 European languages.
By processing translations locally, the TranslatePsy models can operate without an internet connection while keeping users’ data on their devices rather than sending it to third-party cloud servers.
What Translation Unlocks For The Underserved
For hundreds of millions of people across Africa, one of the barriers to modern AI is language. The most powerful tools run in a few major languages and depend on the cloud, putting them out of reach for many.
TranslatePsy-AfriSLM supports Hausa, Amharic, Yoruba, Lingala, Swahili, Igbo, Zulu, Somali, Oromo, Malagasy, Kinyarwanda, Xhosa, Afrikaans, Wolof, Luganda, Nyanja, Shona, Tswana, and Southern Sotho. Together, these languages span West, East, Central, and Southern Africa and represent roughly half of Africa’s population.
Translation across 19 African languages can unlock the ability to deliver courses, educational content, scientific material, and AI-powered learning tools directly to children and adults in their own languages.
Despite containing just 800 million parameters, the smallest TranslatePsy-AfriSLM model outperformed Qwen3.5-122B-A10B, TranslateGemma-27B, and NLLB-3.3B across the FLORES-200, BOUQuET, and SMOL translation benchmarks.
A key innovation is the introduction of a new quality-estimation filtering method that removes up to 96% of low-quality open-source training data. By improving the quality of the underlying data, Tether AI Research was able to achieve stronger translation performance with significantly smaller models.
Healthcare will be one of the highest-impact applications. Patients may speak different local languages, while connectivity can be unreliable in the communities that need information most.
Combined with Tether QVAC MedPsy, a small foundation model for medical and healthcare applications, TranslatePsy-AfriSLM creates a potential pathway to deliver medical knowledge and health education in the local languages of hundreds of millions of people.
Such systems would require appropriate safeguards and clear boundaries between health education and clinical care, but the potential impact is substantial.
Agriculture, Humanitarian Response, and Cross-Border Communication
The applications extend well beyond education and healthcare. Farmers could receive agricultural information in local languages, helping translate technical knowledge into practical guidance. In humanitarian and disaster-response settings, where camps and affected areas may have poor connectivity.
For NGOs and field organizations, local-language translation could help field workers communicate across multiple communities without carrying separate translation systems for every language.
Tether has spent years building physical touchpoints in these communities. Across Sub-Saharan Africa, its solar-powered kiosks let residents charge a phone, swap a battery, and access digital financial services where the grid and the banking system do not reach. Those same hubs could become places where a family charges a phone by day and, by evening, where children watch a science documentary in their own language, or parents learn new farming techniques from a local-language video, turning a charging point into a point of access to knowledge.
The Same Approach, Applied in Europe
The same design principle underpins a parallel release for European languages. Tether AI Research’s TranslatePsy-EuroNano replaces dozens of separate bilingual models with two compact multilingual models per performance tier. Using English as a pivot, the models support 90 translation directions across nine European languages. The smallest deployment requires just 36MB of storage, compared with 633MB for an equivalent Firefox offline translation configuration, reducing storage requirements by approximately 94%.
TranslatePsy-EuroNano, the highest-quality model in the European family, retained 98.4% of Meta’s NLLB-200 translation quality when translating into English while using a fraction of the storage required by larger systems.
“Four billion people were left behind by the traditional financial system, and the most powerful technology of our age has repeated that failure,” said Paolo Ardoino, CEO of Tether. “Language should not determine who can benefit from artificial intelligence. Open translation models like these are a step toward a future where education and AI tools reach hundreds of millions of people who have neither reliable connectivity nor access to expensive systems. A mother could get real medical information she understands, instead of guessing. A child could learn in their own language. That is the future we are building through QVAC.”
TranslatePsy-AfriSLM is available for download on Hugging Face at this link, in three sizes (full-precision and smaller quantized versions):
qvac/TranslatePsy-AfriSLM-0.8B qvac/TranslatePsy-AfriSLM-2B qvac/TranslatePsy-AfriSLM-4B TranslatePsy-Nano is available for download on Hugging Face at this link: https://huggingface.co/collections/qvac/translatepsy-nano. It supports both European and African language translation, with models offered in full-precision and quantized versions: :
qvac/TranslatePsy-EuroNano qvac/TranslatePsy-AfriNano The research underpinning TranslatePsy-AfriSLM has also been accepted for presentation at the Empirical Methods in Natural Language Processing (EMNLP) 2026 conference.
About Tether AI Research
Tether AI Research is part of Tether’s broader vision to advance freedom, transparency, and innovation through technology. Its mission is to enable people and organizations to connect and share information directly, without unnecessary intermediaries. By creating secure, peer-to-peer systems, Tether AI Research gives users greater control over their data, communications, and digital interactions. Tether AI Research aims to redefine how information flows across networks by replacing centralized models with decentralized infrastructure designed for privacy, efficiency, and resilience.
*References to Tether AI Research mean Tether Data, S.A. de C.V.
About QVAC
QVAC is Tether’s advanced AI research initiative dedicated to building open, decentralized, and adaptive intelligence systems. Its mission is Local AI and Infinite Intelligence. It is guided by an uncompromising vision of a world where AI lives and learns on any device, empowering individuals and communities rather than concentrating power in corporate data centers.
Tether’s AI research unit just shipped something that has nothing to do with stablecoins and everything to do with the fact that most of the world’s languages are essentially invisible to modern AI. The company released an open-source neural machine translation model family called TranslatePsy-AfriSLM, covering 19 Sub-Saharan African languages with a dataset of roughly 215 million bidirectional training examples paired with English.
The models are tiny. We’re talking 21 to 35 MB per language pair, small enough to run directly on a phone without ever pinging a server. That’s the point: translation that works offline, keeps data private, and doesn’t require the kind of cloud infrastructure that rarely exists in the regions where these languages are actually spoken.
What Tether actually built The project, developed by Tether’s QVAC division, includes both the dataset and the translation models themselves. The dataset, called TranslatePsy-AfriSLM-Synthetic-Mix, is hosted on Hugging Face under a CC BY-NC 4.0 license, meaning researchers and developers can freely use it for non-commercial purposes.
Languages covered include Swahili, Yoruba, and Amharic, among 19 Sub-Saharan African languages total.
The models are built to be Bergamot-compatible, which matters because Bergamot is the open-source translation engine that Mozilla uses in Firefox’s built-in translation feature. Compatibility with that ecosystem means these models can slot into existing infrastructure without developers needing to rebuild from scratch.
Speed is the other headline number. The models process a sentence in approximately 46 milliseconds, which QVAC claims makes them up to 78 times faster than larger models like Salamandra-2B.
The QVAC SDK and European language coverage Alongside the African language models, Tether released the QVAC SDK, a software development kit that bundles various AI models into a unified deployment framework. European language support comes through this SDK rather than through separate dedicated datasets, giving developers a single integration point for multilingual translation.
According to QVAC’s documentation, the SDK can extend coverage to dozens or even hundreds of languages using approximately 50 language pairs to cover 26 languages.
The accompanying research paper has been submitted to EMNLP 2026 and is available on arXiv (arXiv:2608.18655). The code and models are documented on GitHub under Tether’s AI research organization at tether-ai-research/qvac-translatepsy-afri-slm.
Why a stablecoin company is building translation AI Tether’s stablecoin sees massive adoption across Africa, Southeast Asia, and Latin America, regions where local currencies are volatile, banking infrastructure is thin, and where many of the world’s low-resource languages are spoken. Building AI tools that work in those languages, on devices common in those markets, and without requiring persistent internet connections is a play that reinforces Tether’s presence in exactly the communities where its stablecoin already has traction.
By releasing everything under permissive licenses and submitting the research for academic review, Tether is positioning QVAC as a legitimate AI research outfit. Whether that perception sticks will depend on whether the models actually perform well in real-world deployments, something the NLP research community will be testing now that the weights are public.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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Tether’s USDT freezing spree is now under legal scrutiny after two Thai nationals sue the stablecoin issuer for locking their $42.4 million.
The lawsuit was filed on the 31st of August at the Southern District of New York (SDNY). According to the plaintiff, Nutthawat Rukthammachalern and Natthawat Kasamvilas, Tether has been driving deceptive USDT marketing and has profited from the frozen funds.
The duo added that Tether does not clearly state that it has arbitrary powers to freeze one’s USDT at a moment’s notice. Additionally, they claimed that the issuer has been earning interest from the reserves backing their frozen $42.4 million worth of USDT tokens.
The victims’ primary argument is that Tether froze their funds without a warrant or court order. This happened on 30th October 2026, resulting in the seizure of victims’ funds across 10 wallets on the Ethereum [ETH] network.
According to the defendants, Tether’s action occurred after an informal request by U.S. Homeland Security Investigations (HSI). But there was no immediate legal warrant or court order before the action.
Besides, the formal seizure warrant came only three months later, in February, tied to a pig butchering romance scam investigation in North Carolina.
As a result, the duo sought the court to declare Tether’s seizure had no legal basis and prevent it from destroying their USDT. Additionally, the victims want their funds, plus all earned interest income.
Unsurprisingly, the lawsuit has elicited mixed reactions from analysts and policy experts.
Is Tether or the U.S. government at fault for USDT freezes? According to Austin Campbell, adjunct professor at Columbia Business School, money transmitting businesses (MSBs) have a “100% obligation to freeze” if they suspect illegal activity.
However, Campbell noted that ignoring such activity is what got Binance founder Changpeng Zhao (CZ) jailed. However, he cautioned the plaintiff that since the funds were tied to scams, they may have exposed themselves.
Well, this seems insane, and I would suggest these two gentlemen have probably put themselves in the crosshairs of US law enforcement…Not great!
Source: X For Campbell, the victims should have sued the U.S. government, not Tether.
If the DOJ or HSI shows up and tells a bank to freeze your funds because they are criminal activity, you’re not going to have a cause of action against the bank. It will be against the government if they were grossly negligent or lied.
But another analyst viewed Circle’s slow response to freezes as a better approach.
Source: X Therefore, it will be interesting to get the court’s judgment on this.
That said, stablecoins account for 84% of illicit crypto volume, and Tether has been actively trying to resolve part of it.
As of mid-August, Tether has done over 3000 freezes, translating to $5.8 billion across Tron and Ethereum. Additionally, over $1 billion has been linked to OFAC sanctions against Iran.
Source: Bitquery Final Summary Tether has been sued for a $42.4 million USDT freeze and profiting from the interest income on locked funds. Tether has frozen nearly $6 billion in 2026 amid regulatory pressure from the U.S.
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In brief Two Thai businessmen sued Tether in New York federal court on Monday. They claim the company froze roughly $42.4 million worth of USDT at a federal agent’s informal request. The plaintiffs want access restored and are seeking damages and income allegedly earned from the reserves backing the tokens. Two Thai businessmen sued Tether on Monday, claiming the stablecoin issuer froze roughly $42.4 million worth of USDT without legal authority.
Nutthawat Rukthammachalern and Natthawat Kasamvilas filed the complaint in the U.S. District Court for the Southern District of New York. It names four Tether entities and concerns USDT held across ten Ethereum addresses.
Myriad: Ethereum price this week? Click to make your prediction.According to the complaint, Tether blacklisted the addresses last October at the informal request of a Homeland Security Investigations agent, without a warrant or court order. More than three months later, a federal magistrate judge in North Carolina issued a seizure warrant outlining a plan for Tether to burn the restricted tokens, mint replacement USDT, and transfer it to a government-controlled wallet.
"The new lawsuit against Tether is a baseless attempt to interfere with Tether’s important work with global law enforcement, including the Department of Justice, to prevent the unlawful use of USDT,” Tether said in a statement shared with Decrypt.
The plaintiffs argue that the warrant neither retroactively authorized the freeze nor permitted Tether to destroy the original tokens before a final forfeiture judgment.
“Tether froze our clients’ funds following an informal government request with no warrant, no court order, no legal process directed to Tether and no notice,” Mark Beckett, counsel for Rukthammachalern and Kasamvila, told Decrypt in a statement.
“A warrant followed nearly four months later but Tether has no contractual relationship with our clients, is not a custodian of our clients’ USDT, and has no legal right or basis to blacklist our clients’ accounts,” Beckett said.
Tether controls administrative functions in USDT’s smart contract that allow the company to blacklist cryptocurrency addresses on various networks, including Ethereum. Blacklisted tokens remain visible on the blockchain but cannot be transferred. Tether can also burn USDT held at those addresses.
In April, Tether said that it works with more than 340 law-enforcement agencies across 65 countries. Tether said that cooperation had helped freeze more than $4.4 billion in assets connected to suspected unlawful activity.
“USDT is not a safe haven for illicit activity,” said Tether CEO Paolo Ardoino in a statement at the time. “When credible links to sanctioned entities or criminal networks are identified, we act immediately and decisively. Recent events have shown what happens when platforms fail to move quickly, enforcement breaks down, users are exposed, and trust erodes.”
Rukthammachalern and Kasamvilas said they acquired the USDT in secondary-market business transactions and never opened Tether accounts, bought tokens directly from the company, or agreed to its terms.
Attorneys for the plaintiffs rejected claims that their clients were involved in illicit activity and disputed social media posts suggesting otherwise.
“To be clear, our clients acquired their USDT through legitimate commercial activity. They vigorously and categorically reject any suggestion that they were in any way involved in any sort of illegal activity and are actively contesting the government’s position in the Eastern District of North Carolina, as the complaint recites,” they told Decrypt.
Editor's note: This story was updated after publication to include comments from Tether and from attorneys for the plaintiffs.
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