A Brief History of Tether
Tether’s story began in 2014, when Brock Pierce, Reeve Collins, and Craig Sellars introduced a project called Realcoin.
At its core was a simple idea — to create a digital asset pegged to fiat money that could be transferred quickly on a blockchain. It would allow traders to lock in profits without cashing out into fiat, which was relatively difficult due to the underdeveloped infrastructure.
The problem, however, was that smart contract platforms like Ethereum did not yet exist. To bring the idea to life, in 2014 the team built its own protocol on top of the Bitcoin network, initially called Mastercoin. Today, this solution is known as Omni Layer, and in that same year, Realcoin was renamed Tether.
As the industry evolved, the token moved beyond Omni and appeared on other networks, including Ethereum and Tron, making it more accessible and convenient. Notably, USDT tokens on Omni Layer were issued until 2023, when the issuer dropped support for the protocol due to low user demand.
In 2015, Tether integrated with Bitfinex — one of the largest cryptocurrency exchanges at the time. This was a major milestone for the project, as USDT was used in real trading transactions for the first time.
That said, the relationship between Tether and Bitfinex went beyond token support. From the outset, the companies were closely connected through shared executives and an intertwined ownership structure. Later, these ties became one of the main reasons regulators turned their attention to the issuer.
In 2019, the New York State Attorney General’s Office accused Bitfinex and Tether of concealing financial problems related to losing access to $850 million in client and corporate funds. Later, in 2021, the parties settled the dispute. Under the agreement, the companies agreed to pay $18.5 million and stop serving users from New York.
That same year, the CFTC fined Tether $41 million over claims that USDT was fully backed by the U.S. dollar. The regulator said that during certain periods the company did not hold enough fiat reserves to cover all tokens in circulation.
Starting in 2020, Tether entered a phase of active expansion. The amount of USDT in circulation began to grow, and the token itself became one of the main settlement instruments, especially on centralized exchanges, as well as in countries where access to bank accounts, international transfers, or foreign currency is limited.
The company’s reputation, however, remained mixed. On the one hand, Tether was criticized for low transparency, regulatory risks, and centralized control. On the other — USDT’s scale of use, its supply, and the issuer’s profits continued to grow.
In response to criticism in April 2021, Tether published its first quarterly consolidated reserve report, audited by Moore Cayman, and announced that it would provide similar documents on a quarterly basis.
At the time of writing, the stablecoin issuer’s website features a ‘Transparency’ section where information on the number of tokens in circulation, as well as quarterly reserve reports, can be found. However, it is important to note that this data relates solely to the funds used to back the stablecoins and does not reflect the assets on the balance sheet of the entire Tether group of companies.
Therefore, the declared transparency is in fact limited and is intended more to prevent information attacks on the stablecoin than to disclose the true state of affairs of the company and its affiliated organisations. Moreover, since 2025, the volume of published data has decreased, which we will discuss in the next section.
Tether only initiated a full audit in 2026 amid difficulties in attracting investment. And, if successful, this could permanently eliminate the company’s key weakness — a lack of transparency.
In 2025, Tether also announced that it had obtained a digital asset service provider license in El Salvador and was preparing to relocate its headquarters to that jurisdiction. In addition, the company continued USDT’s expansion and ecosystem growth through other направления.
