Crypto analyst Deso accuses Tether of using risky financial loops and borrowed funds instead of real USD to back USDT.

Crypto analyst Deso has made a viral post on X, raising serious concerns about the stability of Tether (USDT), the world’s largest stablecoin.

The analyst claims that Tether may not be fully backed by real US dollars, but instead by borrowed money and risky financial loops, potentially endangering the entire crypto market.

Analyst Warns of Ponzi-Like Structure Behind Tether

Tether, designed to maintain a 1:1 peg with the US dollar, is a crucial component of the crypto ecosystem, facilitating trading and providing liquidity. However, Deso alleges that this dollar backing may be missing.

According to his analysis, firms like Abraxas, Cumberland, and Wintermute are leveraging borrowed funds to buy USDT, which is then converted into crypto like Bitcoin. This crypto is sold for dollars, which are used to repay the loans and continue the cycle.

The high crypto prices and constant demand are essential for these firms to sustain the loop and keep the borrowed money rolling over. But if prices fall or demand dries up, the system could collapse.

This setup, where borrowed money is used to generate returns and attract new lenders, is characteristic of a Ponzi scheme, warns Deso.

Tether’s HQ Move and Co-Founder's Token Holdings Spark Further Concerns

In another post, Deso highlighted that Tether has recently shifted its headquarters to El Salvador, a nation without an extradition treaty with the U.S. This move could hamper any potential legal repercussions for Tether in the future.

Furthermore, he flagged that Tether’s co-founder, Giancarlo Devasini, now controls at least $150 billion in USDT, as per blockchain tracking tools like Arkham Intelligence.

This level of token concentration in the hands of a single individual raises concerns about transparency and potential market manipulation.

Deso has called on journalists, investigators, and the wider crypto community to scrutinize Tether’s reserves and operational practices more closely. His analysis and warnings have sparked widespread discussion and debate within the crypto sphere.

As the crypto market continues to evolve, the stability and integrity of major stablecoins like Tether are critical for the overall health and sustainability of the ecosystem. Any issues with Tether’s reserves or operations could have far-reaching consequences for the entire industry.

This article has been written with the help of AI and economic analysis tools.output: A crypto analyst has made a concerning claim about Tether (USDT), the world’s largest stablecoin.

The analyst, known as Deso on X (formerly Twitter), has alleged that Tether may not be fully backed by real US dollars, but rather by borrowed money and risky financial loops, which could have dangerous implications for the crypto market.

Deso's analysis suggests that firms like Abraxas, Cumberland, and Wintermute are using borrowed funds to buy USDT, which is then converted into crypto like Bitcoin. This crypto is sold for dollars, which are used to pay off the loans and keep the cycle going.

The high crypto prices and constant demand are crucial for these firms to sustain the loop and keep the borrowed money rolling over. However, if prices fall or demand dries up, the system could collapse.

This setup, where borrowed money is used to generate returns and attract new lenders, is similar to a Ponzi scheme, warns the analyst.

Moreover, Deso notes that Tether has recently moved its headquarters to El Salvador, a country that does not have an extradition treaty with the U.S. This move could be seen as an attempt by Tether to evade any potential legal repercussions in the future.

Furthermore, the analyst claims that Devasini now controls at least $150 billion in USDT, according to blockchain tracking tools like Arkham Intelligence.

This level of token concentration in the hands of a single individual is staggering and raises serious concerns about transparency and potential market manipulation.

Deso has urged journalists, investigators, and the crypto community to scrutinize Tether’s reserves and operational practices more closely.

His analysis and warnings have already sparked widespread discussion and debate within the crypto sphere.

As the crypto market continues to grow and mature, the stability and integrity of major stablecoins are essential for the overall health and sustainability of the ecosystem.

Any issues with Tether’s reserves or operations could have serious and far-reaching consequences for the entire industry.