In the past, we have witnessed black Swans brought by news of war, regulator's action on reputable projects and centralized exchanges, the FTX saga, etc. Most Crypto professionals have come to terms that there is always the possibility of a black swan erupting at any point in time until the whole framework of cryptocurrency is legally structured.

With the approval of Bitcoin ETFs, many Crypto enthusiasts believe that Cryptocurrency is here to stay, while some others predict a roaming big black Swan.

With the likes of Coinbase and Binance ( the leading centralized exchanges) being attacked already by regulators, an attack on any other exchange won't be able to crumble the market hugely. There is only one asset that can shake the Crypto world if regulators should probe into it, and that's Tether, the issuer of USDT.

Stablecoins are a crucial aspect of the cryptocurrency market that helps maintain stability. Tether has the largest share in the Stablecoin market, as such, any regulatory action on Tether will shake the Crypto world.

In October 2021, Tether paid a $41 million fine to the Commodity Futures Trading Commission after the regulator said Tether “misrepresented to customers” its reserve holdings and found it held sufficient fiat reserves to back USDT for “only 27.6% of the days” between June 1, 2016 to Feb. 25, 2019. U.S. Senator Cynthia Lummis in October 2023 urged the Department of Justice to evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism.

These incidents at those times affected the Tether Stableccoin (USDT) market share, because some investors were forced to move towards the alternatives.

In recent news gathered from Cointelegraph, Ripple CEO Brad Garlinghouse says it is “clear” that the United States government is “going after” stablecoin issuer Tether — which could have an unpredictable impact on the crypto markets.

What kind of impact should we expect?

Crypto users run to Stablecoin to reduce exposure to Crypto Volatility, a regulatory attack on USDT will have the following possible impact.

There will likely be a huge reduction in Tether Stablecoin Market Share, as investors will switch to other alternatives.

The price of Bitcoin may skyrocket. This will happen because investors, especially those in places where there is Crypto taxation, will convert their Tether holding to Bitcoin as it would be the safest bet. If Tether is attacked, other Stablecoins won't be left out.

There will be a high demand for Crypto to fiat conversion which can cause panic in the Crypto market.

It is important to express that Tether has been trying to be regulatory compliant, as such, a probe into their activities may not give negative results. Also, this is still speculation and may not come to pass.

What do you think will happen if Tether's activities are attacked by regulators?