FinTelegram anticipates that Tether, the world’s leading stablecoin issuer, may be banned in the EU starting in 2025 due to non-compliance with the EU’s new MiCA (Markets in Crypto-Assets Regulation) framework. Tether has not applied for or received MiCA authorization, raising questions about its future in Europe. Moreover, its investment in the European stablecoin issuer StablR represents a red flag.
Background
Tether recently invested in the European stablecoin provider StablR, based in Malta and licensed by the Maltese Financial Services Authority (MFSA) to navigate the EU’s strict regulatory environment. This move appears to be a strategic attempt to make Tether stablecoins tradable and available within the EU under the guise of StablR’s license.
However, FinTelegram’s investigations raise serious concerns about the credibility of StablR. The company was founded by Gijs op de Weegh, the former COO of the notorious Dutch payment processor Payvision. During his tenure, Payvision was implicated in large-scale money laundering, facilitating cybercrime clients who laundered hundreds of millions of euros. Op de Weegh was subsequently convicted of violating Dutch financial laws.
Read our report about Tether and StablR here.
Analysis
- MiCA Compliance Challenge: MiCA sets stringent regulatory requirements for stablecoin issuers operating in the EU. Tether’s failure to secure authorization under this regime places its market position at significant risk.
- Questionable Partner: StablR’s association with a convicted executive raises red flags regarding its reliability as a compliance partner for Tether. FinTelegram has reported extensively on the murky background of StablR and its founder’s involvement in financial misconduct.
- Strategic Risk: Tether’s reliance on a partner with questionable credentials could backfire, further jeopardizing its reputation and compliance strategy in the EU.
FinTelegram Position
Tether, the largest stablecoin with a market capitalization of $139.28 billion, faces potential disruption as the EU tightens #cryptocurrency regulation. MiCA requires stable cryptocurrencies such as Tether (USDT) to have an electronic money license. Failing to meet this requirement, Tether risks being delisted from European crypto exchanges by December 30, 2024.
FinTelegram does not view the new EU partner of Tether, StablR, as a trustworthy provider and questions Tether’s judgment in aligning with an entity linked to past regulatory violations.
Investor Implications
- Heightened Risk Exposure: Investors in Tether or companies reliant on its stablecoin should be aware of the significant regulatory and reputational risks associated with its EU operations.
- Alternative Strategies: Consider stablecoins issued by providers with established MiCA compliance and a strong regulatory track record.
- Monitor Developments: Stay informed on MiCA implementation timelines and FinTelegram’s reporting on Tether and StablR developments.
Call to Action
FinTelegram urges investors to exercise caution when engaging with Tether in the EU market and avoid reliance on StablR as a conduit for stablecoin transactions.
For detailed reports on StablR and its questionable ties, visit FinTelegram’s archive.
