Former Securities Exchange Commission (SEC) enforcement official John Reed has questioned the implication of the alleged lack of transparency by USDT stablecoin provider Tether.

According to Reed, who worked with SEC for almost two decades, Tether’s failure to disclose key information about its balance sheet might be a sign the firm is operating as a ‘house of cards’, Reed said in a tweet. 

The former SEC official made the remarks in response to a December 2 CNBC interview where Tether co-founder Reeve Collins was tasked to explain the company’s lack of full disclosure, especially in the wake of the FTX cryptocurrency exchange collapse. Based on Collins’ response, Reed suggested that the company was running a Ponzi scheme. 

“Wow, tell us Tether is running a Ponzi scheme without telling us that Tether is running a Ponzi scheme. Just listen to his answers. IMHO, as a former SEC enforcement official of 18 yrs, the evasion/deflection/lack of responsiveness makes me believe Tether is a house of cards,” Reed said. 

(By Paul L.)