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CNBC Star Jim Cramer: Tether Could Be "Achilles Heel of Cryptocurrency"

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Wed, 07/21/2021 - 08:59
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Arman Shirinyan
CNBC's Mad Money host is worried about Tether's commercial papers that back up more than 60% of USDT stablecoins
CNBC Star Jim Cramer: Tether Could Be "Achilles Heel of Cryptocurrency"
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During an interview with The Street, Jim Cramer, the host of CNBC's Mad Money, expressed concern about Tether's secrecy related to the company's commercial papers that are backing USDT's value.

According to the company's reserve breakdown from May 13, 75 percent of the funds that are backing up the USDT stablecoin are cash or equivalent, short-term deposits and non-disclosed papers. Out of 75 percent of those holdings, 65 percent are commercial papers. On March 31, reserve breakdown cash alone accounted for only 3.87 percent of all USDT-backed assets.

Reserve Breakdown Tether
Source: Tether

It was not the first time that Cramer expressed his frustration about Tether's fund disclosure policy. During a testimony, the 16th Chair of the Federal Reserve expressed his concern about Tether, a move that Cramer welcomed on Twitter.

Jim Cramer's concern was the actual papers that Tether is holding. The value of commercial papers that Tether owns is close to $60 billion. Due to a lack of transparency, the CNBC host is worried about the nature of those assets and expresses hope that they are legal.

The Mad Money host has also assumed that SEC chairman Gary Gensler may ask Tether about commercial papers being securities. Cramer suggested that there is a general belief that many of the commercial papers that Tether holds may be Chinese bank papers.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.