Tether to Invest More Than $1B in Deals Over Next Year
Coinspeaker Tether to Invest More Than $1B in Deals Over Next Year
Tether Holdings Ltd, the issuer of the USDT stablecoin and a leading player in the crypto industry, is gearing up for a substantial investment spree. According to CEO Paolo Ardoino, Tether Investments is poised to inject more than $1 billion into various deals over the next 12 months.
With a team of 15, the investment arm is not limiting itself to a single sector. Ardoino stated that the company evaluates hundreds of pitches monthly, primarily from startups. Their focus spans across alternative financial infrastructure for emerging markets, artificial intelligence (AI), and biotechnology. These are areas where Tether has already invested around $2 billion over the past two years.
Tether’s Financial Strength
Tether’s USDT stablecoin tracks the US dollar and boasts a market capitalization of around $112.4 billion. In a high interest-rate environment, Tether has strategically invested most of its reserves in US Treasury bills and other securities, reaping substantial profits. The company ensures 100% reserve backing for USDT, with an additional 6% cushion taken from profits to facilitate smooth redemptions.
Tether’s profitability has been noteworthy, with a reported profit of $4.5 billion in the first quarter, as per the data from third-party attestations rather than full financial audits. Tether plans to channel a portion of its profits into various deals with the aim of expanding its distribution network and investing in infrastructure in emerging markets.
A notable example is Tether’s recent $18.75 million investment in XREX Group, a regulated blockchain-enabled financial institution. This investment aims to drive innovation and support USDT-based cross-border payments in these markets.
Moreover, a significant part of Tether’s investment strategy involves AI. The company has already invested more than $1 billion into the sector, such as by supporting data center operator Northern Data Group. Ardoino told Bloomberg:
“We can offer AI computing to all the companies we have invested in. It’s all about investing in technology that helps with disintermediation with traditional finance. Less reliance on the big tech companies like Google, Amazon, and Microsoft.”
Despite past regulatory challenges, including settlements with the New York Attorney General and the Commodity Futures Trading Commission in 2021, Tether has managed to maintain the USDT’s value pegged to the dollar. The elevated interest-rate environment has significantly contributed to Tether’s profitability in recent years.
This cautious approach contrasts sharply with the fate of TerraUSD (UST), another stablecoin that collapsed in May 2022. TerraUSD’s failure was attributed to its inability to maintain its pegged value, leading to a crisis of confidence and a bank run-like phenomenon.
“You can imagine that the news that Tether is making good money went around the world. We get tens or hundreds of deals per month that are on the table, and we only end up doing a very small percentage of that,” Ardoino stated.
next
Tether to Invest More Than $1B in Deals Over Next Year
Coinspeaker Crypto.com Secures Regulatory License in Ireland
Crypto.com, a leading digital assets trading platform, has received regulatory approval to operate legally in the Republic of Ireland. In an official announcement on Tuesday, the company said it has been certified by the Central Bank of Ireland to operate as a Virtual Asset Service Provider (VASP).
The company, which boasts over 100 million users globally, can now provide its full range of products in Ireland, including crypto-to-fiat exchanges and custody services in compliance with local regulatory policies.
Crypto.com Subjected to Thorough Review
Crypto.com was subjected to stringent scrutiny before receiving the final nod from the Central Bank to explore the market. The bank reviewed the company’s compliance measures, particularly its capabilities in anti-money laundering (AML) and combating the financing of terrorism (CFT).
Eric Anziani, the President and COO of the company, sees the latest expansion to Ireland as a testament to Crypto.com’s commitment to compliance requirements across its key markets.
“This approval from the Central Bank of Ireland is the latest testament to our commitment to compliance and responsible innovation. We are excited to broaden our offering in Ireland, enabling consumers to engage with the most comprehensive crypto product suite,” he said.
The firm has now joined the growing list of crypto exchanges expanding to Ireland. Companies like Coinbase and Kraken obtained the same VASP licenses from the Central Bank of Ireland in 2023.
Coinbase even chose Ireland as its European headquarters, highlighting the country’s growing importance in the crypto space.
Expanding Global Footprint
Since its launch in 2016, Crypto.com has been expanding its global presence. Beyond its recent approval in Ireland, the company has secured regulatory licenses in several other countries, demonstrating its dedication to meeting stringent regulatory standards.
In Singapore, the company has received a Major Payment Institution (MPI) license for Digital Payment Token (DPT) services and an e-money issuance license from the Monetary Authority of Singapore.
In France, it operates as a regulated Digital Asset Service Provider (DASP) under the Autorité des marchés financiers (AMF).
The exchange is also fully regulated in Dubai under the Dubai Virtual Assets Regulatory Authority (VARA) and was authorized as an Electronic Money Institution (EMI) by the Financial Conduct Authority (FCA) in the United Kingdom in December 2023.
Additionally, Crypto.com is registered under the Electronic Financial Transaction Act in South Korea, further solidifying its regulatory compliance across key markets.
Commitment to Compliance
The company’s expansion into Ireland and other markets underscores its commitment to compliance and security. By adhering to local regulations and obtaining necessary approvals, the company aims to provide a safe and reliable platform for its users worldwide.
Crypto.com, which prides itself as an industry leader in regulatory compliance, security, and privacy, currently offers a suite of product offerings that align with market demands in various jurisdictions.
Users from across the world where Visa is accepted for payments can buy different cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) on the platform using their cards.
The firm also has a dedicated crypto wallet that allows customers access to the world of decentralized finance (DeFi). Through this wallet offering, users can store all their assets in one place.