TLDR:
Tether minted $2B in USDT on Tron, raising fears of liquidity strain during redemptions.
EU rules forced Binance and Kraken to delist USDT due to reserve compliance issues.
Tether lacks a full audit, relying on quarterly attestations despite $115B reserve claims.
Analysts warn USDT collapse could freeze DeFi platforms and disrupt global crypto trading.
A crypto analyst has raised serious concerns about Tether’s stability, warning the world’s largest stablecoin could face a complete collapse.
The warning comes as European exchanges begin delisting USDT following new regulatory requirements. Recent minting patterns and regulatory challenges have sparked fresh debates about Tether’s backing claims.
Industry observers point to historical precedents like Terra Luna’s collapse as potential warning signs. The concerns highlight growing questions about transparency in the $115 billion stablecoin market.
Tether’s Fresh USDT Minting Raises Red Flags
Tether recently minted $2 billion in new USDT tokens on the Tron blockchain, labeling them as “authorized but not issued.”
According to Chain Mind, a crypto researcher, this pattern often signals preparation for market stress. The practice allows Tether to have tokens ready for potential redemption waves without immediately releasing them into circulation.
$USDT will crash to $0 like $UST?
– EU exchanges delisted Tether
– No audits for years
– Brand new authorized but not issued USDT minted
I researched all the data and leaked docs
Here is why Tether will scam and when
pic.twitter.com/LroZmTZtNg
— 𝗖𝗛𝗔𝗜𝗡 𝗠𝗜𝗡𝗗 
(@0xChainMind) June 26, 2025
However, critics argue this approach could backfire during periods of high demand. If these reserves get deployed during massive redemption requests, it might signal underlying liquidity problems.
The timing of such large mints has historically coincided with market volatility periods.
Regulatory Pressure Mounts Across Europe
The European Union’s Markets in Crypto-Assets regulation now requires stablecoins to maintain 60% of reserves in EU banks.
Tether refused to comply with these new requirements, leading major exchanges like Binance and Kraken to delist USDT in European markets. Instead, Tether has backed a new euro-compliant stablecoin called StablR as a potential workaround.
This regulatory pushback represents the most significant challenge to Tether’s global dominance since its inception. The delisting affects millions of European crypto traders who relied on USDT for trading pairs.
Market analysts suggest this could reduce Tether’s liquidity and trading volume significantly.
Tether Audit Concerns Continue Despite Claims
Tether maintains it holds $115 billion in US Treasuries plus $5.6 billion in excess reserves, according to their Q1 2025 report.
Yet, according to Chain Mind, the company has never completed a full independent audit, relying instead on quarterly “attestations.” The New York Attorney General previously found Tether’s 1:1 USD backing claims were false, resulting in an $18.5 million settlement in 2021.
Critics point to past instances where Tether allegedly moved funds temporarily before reporting periods. The company also faced scrutiny for secretly covering an $850 million loss through its relationship with Bitfinex exchange.
These historical issues fuel ongoing skepticism about reserve transparency.
USDT currently represents 62% of the entire stablecoin market and facilitates most cryptocurrency trading globally. A collapse would likely trigger cascading effects across DeFi platforms like Aave and Curve, which use USDT as core collateral.
Even a brief 1% depeg in 2022 caused significant market disruption and exchange liquidity issues.
The interconnected nature of crypto markets means Tether’s failure could freeze trading across multiple platforms simultaneously. Alternative stablecoins like USDC and DAI exist but lack USDT’s widespread adoption, particularly in Asian and emerging markets where Tether dominates trading volume.
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