Tether has nearly $90 billion in funds that can be deposited into high-yield bank accounts and invested cautiously.

Author: Daniel Kuhn@Consensus Magazine

Translation: Qin Jin, Carbon Value

After a year with the potential to make a brilliant profit of $4.5 billion, the newly promoted CEO of Tether is seeking to diversify the company's investments.

The "wise views" of educated or influential elites in the cryptocurrency industry are that Tether, the manufacturer behind the world's largest stablecoin USDT, has been unfairly maligned but may ultimately fail. USDT is not only the most successful stablecoin (a blockchain-based asset designed to maintain a stable value), but can also be said to be the most successful cryptocurrency product to date. While the market value of USDT may not be as high as BTC or ETH, the two largest free-floating cryptocurrencies, it surpasses them in trading volume. Therefore, if USDT were to collapse as some people expect, it would be a devastating blow.

People use Tether. It is used for trading, hedging, transfers, payments, bridging, exchanges, valuation, and accounting. In other words, Tether is like currency. It is used in the same way as the US dollar. In fact, this is the crux of the problem—Tether's creation of USDT brings the US dollar onto the chain, and now, because the US dollar is on a blockchain that is always running and globally accessible, the US dollar can be used anytime, anywhere in the world.

What's the big deal? Ask the so-called truth-seekers of Tether (those who believe the company has been maliciously maligned), and they may point out other uses of Tether. Tether is sometimes used for bribery, sanctions violations, and money laundering. Some say Tether is also used to support the overvaluation of the entire cryptocurrency market. Those skeptical of Tether often just repeat various claims made since Tether was founded in 2014 to show contradictions.

The explanations of how Tether anchors its equivalent have changed over time—from the US dollar to now the equivalent of the US dollar—raising questions about its reasons, methods, and significance. In many ways, Tether's business structure is simple: it takes in funds and issues USDT. Its operation is no different from banks or money market funds in traditional financial markets. For the largest stablecoin manufacturer, people's biggest concern is equally simple: does it really hold the collateral it should hold?

Paolo's Promotion

All of these concerns about Tether's enormous influence are now the responsibility of Paolo Ardoino, who was promoted to CEO of Tether this year. Ardoino is a company employee. For many years, he has been the public face of the company, which has sometimes been criticized for lack of communication and clear management. Before his promotion, Ardoino was the Chief Technology Officer of Tether and its subsidiary cryptocurrency exchange Bitfinex (he is still the Chief Technology Officer of Bitfinex). He has been working at both companies since their inception, initially as a senior software developer.

There is compelling evidence that Ardoino is one of the most hardworking people in the cryptocurrency field. Look at his GitHub. His code contributions this year amount to 3275 times (for a full-time engineer, 2-3 times a day is considered average), and in 2017, his number of commits reached 37720. In addition to running Tether and writing Bitfinex code (Bitfinex was once the largest exchange), Ardoino also founded Holepunch and served as Chief Strategy Officer, a peer-to-peer communication platform he and his friends conceived five years ago.

In an interview, he said, "Apart from what I'm doing, I have no other hobbies." He mentioned martial arts training, which allows him to stay away from the computer all day. "I really have no other hobbies."

Some people work to live, and some live to work. Ardoino belongs to the latter. Since his promotion to CEO earlier this year, he has been working hard to comply with regulations, keeping his hands and mind active, and persisting in writing code. Ardoino leads a department within Tether that is similar to the "moon landing program," with about 25-30 engineers responsible for developing and researching tools that he believes will make banks and the world a better place someday. The team has already produced some results, such as the decentralized video calling app Keet running on Holepunch.

"Becoming CEO of Tether requires a process. For several months, we have been openly discussing this transition with the board and other management. For some time, I have always considered myself not just a developer," Ardoino said in an email statement. "I enjoy managing teams, planning the company and product strategy, and implementing execution."

The department does not have a formal name, but it can be compared to some of the company's research parks in the past, such as the former telecommunications subsidiary known as Bell Labs (which brought together many famous engineers and helped build the modern internet) or Google's X innovation department. Only Ardoino envisions his department not only as a profit center, but also as a department beneficial to other businesses. The team focuses on Bitcoin node infrastructure and artificial intelligence, as well as other technologies with commercial potential.

"This is a deliberate practice for us," he mentioned, saying the company will invest about 10% of its cash into research and development. While some of Ardoino's other business initiatives are almost "charitable" in nature, Tether expects its Bitcoin mining business to "make money." He said, "We are trying to put ourselves in a position where we cannot do evil in the future because we are building technology that everyone can use." He mentioned Google's now-famous motto "Don't Be Evil."

Humble Beginnings

Ardoino comes from a small village in northern Italy, and he has sharp blue eyes reminiscent of Frank Sinatra. Specifically, Genoa is the "hometown of pesto and focaccia" for him. He fell in love with computers at an early age. He still remembers his first computer: an Olivetti 386 around 1991, with 4MB of memory and a 3.5-inch floppy disk port. It ran on the MS-DOS system. He said, "I remember my father telling me that this computer cost him several months' salary. I was told to use it carefully."

"I was very excited and told all my friends at school," Ardoino said. "I remember my math teacher replying after hearing my words, saying that computers were just a waste of money and time and would never be useful to people." He lived far from his friends and enjoyed spending afternoons on the computer. He grew tired of existing applications like Microsoft Word and Paint. He taught himself to code so he could make his own games.

"Apart from what I'm doing, I have no other hobbies."

He was an early Linux user. He drew inspiration from Linus Torvalds, the founder of the open-source operating system, who released software for free online and invited people to try to improve it. This idea resonated with Ardoino because it was a game that everyone could win. He also read Richard Stallman's "GNU Manifesto" (which is still the foundational document of the free software movement) and Eric Raymond's "The Cathedral and the Bazaar," the latter of which argues that code should be developed from the bottom up, openly, and freely (like a bazaar), rather than from the top down, closed (like a cathedral). Asimov is his favorite author.

He said: "From the outside, the market may seem chaotic and noisy—not at all poetic, but if you immerse yourself in it and observe carefully, the market is extremely efficient." He said, "You can take away a part of the market, but the market remains the market. It is flexible and resilient, while the cathedral is 'a giant stone.' Bitcoin, which emerged a decade after Raymond's writing, is market software."

Ardoino attended the University of Genoa, which was close to home. He studied computer science and applied mathematics. He joined some student groups, hoping to work with Linux and developed a strong interest in distributed computing, parallel computing, and peer-to-peer systems.

He said: "BitTorrent is really precious to me." He remembers the time the software was released, just as he remembers the launch of many peer-to-peer applications. He can recall the specifications of file-sharing software, from Gnutella to Napster, and then to BitTorrent, Kazaa, and Limewire, like some people recall the kings and queens of England.

As his college career was coming to an end, he was involved in a three-person research project on "resilient networks," where people could communicate even in the worst-case scenario. He loved the work but hated the pay. He said: "As an Italian, your salary is not high. So I started looking for other opportunities."

He said he taught himself finance and economics. In 2011, he found his first job at a hedge fund company, where he was responsible for designing and calibrating trading systems. In 2013, he came to the regional financial center of London and operated his own startup, developing trading software products for hedge funds. According to his LinkedIn profile, the company was called Fincluster. He said: "It was a small startup, but we did very well."

His Team

The leadership of Tether is a close-knit team. Ardoino met former plastic surgeon Giancarlo Devasini in London in 2014. Devasini is now the Chief Financial Officer of Tether and has been operating Bitfinex, offering Ardoino a job at the time. Stuart Hoegner, known as @bitcoinlawyer on Twitter, is a Canadian who has been Bitfinex's legal counsel since 2014. Former CEO Jean-Louis van der Velde has also been working at Bitfinex from the beginning and is still an advisor and CEO of Bitfinex.

This is the team that pushed Tether into the market, although the project's original idea was hatched by the Mastercoin team led by entrepreneur, aspiring politician, and former child actor Brock Pierce under the name Realcoin. Pierce's founding team included William Quigley, Reeve Collins, and Craig Sellars, who exited the project early on. In a sense, the initial idea of Tether was to provide a stopgap for many companies in "Bitcoin 2.0" (the industry's name at the time) that were struggling to access banking services.

Tether was deposited into banks and provided private dollar equivalents to users. It initially promised to hold a corresponding amount of fiat reserves to match the circulating token supply. Many of its early banking relationships were believed to be with banks in Taiwan, which used the services of Noble Bank (in 2017, Tether sued Noble Bank for cutting off its access). Tether was accused of forging invoices and contracts to obtain and maintain banking relationships, and New York regulators found that the company used accounts associated with its executives and "friends of Bitfinex."

Bitfinex is owned by Hong Kong-based Ifinex, while Tether is owned by Singapore-based DigiFinex. A Tether spokesperson clarified that these are separate entities with some common shareholders but operate independently. The spokesperson said in an email: "This distinction is crucial for transparently and accurately reflecting our corporate structure."

"For us, it's true, we know, we're lucky," Ardoino said in an interview. "We're just simple people, and we've made a lot of money in the company. Although it hasn't been smooth sailing."

Essentially, Tether has been plagued by redemption issues since its inception. In an episode of "Odd Lots" in 2021, convicted fraudster Sam Bankman-Fried (who owns Alameda Research, a well-known Tether major user) described the redemption process as straightforward, with occasional minor issues.

The company has been working to maintain banking channels—sometimes using Noble Bank, which was connected to Pierce, and at times using a bank in Montreal (reportedly Hoegner's bank), as well as a "shadow bank" called Crypto Capital Corp—although it has had a relationship with Deltec in the Bahamas for several years.

Ardoino said one of the most tense moments in his career was shortly after the collapse of the Terra/LUNA algorithmic stablecoin project founded by Do Kwon. At the time, hedge fund Fir Tree Capital Management heavily shorted Tether, openly betting that the company would fail. The collapse of Tether's decentralized competitor UST triggered a ripple effect elsewhere, leading to a surge in withdrawals.

Ardoino said: "I think we did well. The company processed about $7 billion in withdrawals within 48 hours and over $20 billion in withdrawals in the next 20 days, accounting for about 25% of the company's total holdings at the time. "It was a very interesting moment. In fact, I quite liked that moment," he said thoughtfully. It forced us to prove to the world that we are indeed reliable.

Spending Money

Tether has money to spend, at least this year. Its market value is just under $90 billion, reaching a historic high, with nearly $90 billion in funds that can be deposited into high-yield bank accounts and invested cautiously. Today, this means primarily investing in US Treasury bonds, which are basically considered risk-free. But it also invests in slightly riskier asset classes, such as repurchase agreements, money market funds, and higher-yielding corporate bonds. This year, the company directly invested over 1% of its holdings in Bitcoin for the first time.

Tether has previously invested in commercial paper from Chinese companies, but later stopped.

Ardoino said: "We have some money to invest. In the first quarter of this year, Tether reported a net profit of $700 million in a voluntary disclosure. Second quarter: $850 million. Third quarter: over $1 billion. Ardoino said that with rising interest rates, the stablecoin business is extremely profitable.

As the largest stablecoin, Tether's position has never been replaced. However, at this time last year, Tether was losing market dominance compared to competitors like Circle's USDC, Binance's BUSD, and MakerDAO's DAI (although Tether has never dominated the DeFi market, as DAI has dominated the DeFi market). This is partly due to regulatory resistance and controversial reputation.

In 2021, the New York Attorney General found that Tether had not consistently "honestly" disclosed its reserve assets. Tether paid a $18.5 million fine for this. In the same year, the U.S. Commodity Futures Trading Commission also made the same allegations and fined the company $41 million for making false statements about its backing and bank accounts.

In October of this year, Tether claimed to have $3.2 billion in excess reserve funds—enough to cover the amount Tether must pay out for every dollar withdrawn from the platform.

Tether also charges fees, $1,000 per withdrawal (minimum $100,000). Ardoino stated that he actively participates in deciding how the company allocates reserve funds and the projects it invests in.

Investing in Infrastructure

Under Ardoino's leadership, Tether positions itself as an infrastructure provider. The company has made significant investments in Bitcoin mining, the construction of hydroelectric facilities in Uruguay, and geothermal facilities in El Salvador, all aimed at providing power for Bitcoin mining.

He said his "Skunkworks" team is developing a Bitcoin node communication channel using the P2P protocol Keet, which will help "coordinate and manage miners, containers, and energy production." The system is called Moria (a reference to "The Lord of the Rings," of which Ardoino is a fan), and it is positioned as a combination of Bitcoin mining and the "Internet of Things."

"If you think about mining, it's an interesting aspect because you have tens of thousands of mining machines and hundreds of thousands of sensors—temperature sensors, oil temperature sensors, wind sensors, light sensors. Everything is a sensor. And then there are containers. They all generate data and contribute to the stability of the system," he said.

Although Ardoino does not have time to micromanage the team, he is still hands-on in the development. He said he personally wrote the first version of Moria. "I think it's important to show people what you want, rather than telling them. I like to be on the front lines. I like to guide and show my experience," he said.

Clearly, he also has many ideas about how to apply this communication technology. Ardoino discussed the assumption of building alternatives to chat applications like Telegram and WhatsApp. He said Keet can economically meet these companies' needs for infrastructure and scalability. "The cost for each Telegram user is about 90 cents per year," he said, roughly calculating server costs.

He stated, "Even if Keet has 1 billion users… BitTorrent has proven this, Keet with hundreds of millions of users will not generate any costs." It is peer-to-peer. Keet currently does not generate revenue. But Ardoino seems willing to bear this cost for now, saying that only 20 people are currently developing the software, which means the annual cost is around $4 million, at least for Tether.

Tether AI

In fact, servers are likely a concern for Ardoino, as Tether recently invested in the EU data company Northern Data. Northern Data is a company with a bad reputation in the Bitcoin mining field. When asked about this, Ardoino laughed and said, "We are the most criticized company in the world, who am I to criticize?"

Ardoino stated that the decision was made for genuine business considerations, including Northern's deal with Nvidia, which could make it "the largest AI infrastructure provider in Europe, if you exclude Google, Amazon, and Microsoft."

He said Northern Data will serve every company in Europe. Every car manufacturer in Europe is striving to compete with Tesla, and every shipping company in Europe is striving to optimize routes, and everyone is begging for AI infrastructure.

Tether also has a small department of fewer than 5 employees researching artificial intelligence to see if there are useful applications for the company and if they can build their own cost-effective large language models, known as LLM (the technology behind contemporary AI). Ardoino stated that Bitfinex and Tether have employees in 60 different countries, and he is particularly interested in whether AI can help meet the company's translation needs.

Ardoino said, "We are just starting this process… We want to truly understand it before scaling up. Of course, the operating costs of AI infrastructure are very high, and even a company like Tether, which is expected to make over $4 billion in profit this year, may quickly find itself in a difficult financial situation (or raising funds from Microsoft)."

Ardoino is a fan of Asimov, known for his utopian imagination of artificial intelligence, and he said that AI could potentially cause "the greatest social upheaval humanity has faced since the Industrial Revolution."

It could potentially make a few companies rich at the expense of the majority, violate privacy as a human right, and lead to mass layoffs.

While Ardoino has some criticisms of the Italian way of life, he still retains some European humanistic thinking. He said Tether will not dismiss employees simply because "AI increases work efficiency." He said, "Everyone has a family, and 'finance' is not the only important thing."

Coming to a Halt?

Ardoino has only been in charge of the company for a few months and does not seem to be planning to stop immediately. However, Tether faces greater regulatory resistance than most cryptocurrency companies, which may not be his choice. Several sitting U.S. senators have singled out the company, calling it a potential threat to national security. The U.S. Treasury has hinted that it is also keeping an eye on the business.

Of course, this is not new. Tether has faced scrutiny from regulatory agencies before, but only received a slap on the wrist. Of course, the company was smaller at the time, but it also had more baggage to deal with. While Tether did indeed lie to the public when it promised to hold all reserves in dollars, it no longer makes that promise. And if it did operate with partial reserves (i.e., reserves less than deposits) at one time, it is likely no longer the case.

Ardoino did not answer questions about potential regulatory action or whether the company still intends to complete an audit.

"I don't plan to stop the work today. I have always loved technology and science in my life. I see the work I can do alone and the wonderful projects I can do with a team. Even in challenging times, I can wake up happily. I am happy to have this opportunity. It allows me to plan and build many of the ideas I have dreamed of. There is still a lot to do," Ardoino wrote in an email.

Whether Tether stops due to market risks or global regulatory agencies, one thing is clear. After nearly a decade without a proper vacation, Ardoino probably needs a break.

"I have never been to Japan. Japan is the country that created the first game console and video games. They have an amazing culture. I think exploring and experiencing other cultures is one of the richest opportunities in life," he said.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。