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Former SEC official explains why Tether is a “giant house of cards”

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Tether is a house of cards

Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark called Tether a “giant house of cards.”

What’s wrong with Tether

John Reed Stark noted that Tether operates without regulatory restrictions because there is currently no legal framework regulating it in the United States. Moreover, U.S. regulators themselves don’t know what requirements to impose on the issuer.

“Tether’s core business, the essence of everything Tether does, is solely related to Tether’s financial reserves. Nevertheless, these reserves remain unaudited, unconfirmed and therefore questionable,” he added.

Therefore, Stark added, customers are left to deal with the “condescending and ineffective chatter of the project’s public relations specialists.”

He also framed Tether’s attestation as questionable, saying that it cannot replace audits. He noted that audits are designed to identify potential risks. At the same time, attestations only verify whether the data presented is accurate at this time. The former top SEC executive is confident that the states should follow Canada’s lead in banning Tether from offering.

“I have no financial interest in the crypto ecosystem – but to me Tether looks like one giant house of cards,” he concluded.

USDT at the peak of popularity

Despite Stark’s harsh criticism, a few days ago, Tether reported net income of $1.48 billion for the first quarter of 2023. At the same time, the company’s excess reserves totaled $2.44 billion.

One possible reason for the strong performance is the problems of USDT’s main competitor, USD Coin (USDC). In March, the stable coin lost its peg to the U.S. dollar after the fall of California’s Silicon Valley Bank. 

We previously reported on what awaits Ethereum – a recovery or further decline.

Cryptocurrency

Ripple (XRP) News Today August 5th

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Developments surrounding the case against the SEC, the advancement of RLUSD, and enhanced XRP price volatility – check out some of the latest news associated with Ripple and its native cryptocurrency.

The Ripple/SEC Case Remains Ongoing

The legal tussle between Ripple and the US Securities and Exchange Commission (SEC), which started in December 2020, still awaits its official conclusion. Back then, the regulator accused the company of breaching certain laws when selling XRP tokens and initially demanded a fine of $2 billion. 

The case underwent numerous developments over the following years, with Judge Analisa Torres ruling in 2023 that Ripple’s sales on secondary markets did not constitute securities offerings, followed by a $125 million penalty. Moreover, both parties later shook hands on an even smaller fine of $50 million.

However, the Commission’s appeal on the 2023 ruling remains pending, and it is required to submit a status update on the matter by August 15. Just recently, the American lawyer Bill Morgan wondered whether the SEC’s Chairman Paul Atkins could influence the commissioners to vote to dismiss the content. 

Marc Fagel, a former regional director of the SEC for the San Francisco office, said the members have already done so before the arrival of the new Chair.

“So it seems pretty obvious where this is going. They just have to get through the standard internal approval process,” he added.

RLUSD’s Advancement

Ripple’s stablecoin, named RLUSD, officially saw the light of day in December last year. It is pegged 1:1 to the American dollar and is designed to facilitate instant settlement of cross-border payments, among other purposes. 

The product has caught the eye of some well-known financial players in the last few months. The oldest US bank, BNY Mellon, agreed to serve as a custodian for RLUSD, whereas the Swiss AMINA Bank recently became the first banking institution to support the product directly. 

“At AMINA Bank, we are committed to integrating cutting-edge products so that our clients may best navigate and adopt digital assets in their day-to-day activities. We are proud to be the first bank to support RLUSD and to provide our clients with access to one of the most anticipated digital assets in the market.

Ripple’s commitment to transparency and compliance make them ideal collaborators as we continue our mission to expand institutional-grade digital asset services,” the entity’s CPO said.

Meanwhile, RLUSD’s market capitalization continues to grow, currently standing at over $600 million. 

XRP Price Outlook

The cryptocurrency market has experienced a substantial correction over the last several days, and Ripple’s cross-border token was no exception. Its price briefly plummeted to $2.75 over the weekend but later recovered above $3. 

Some factors suggest that XRP could witness another pullback in the short term. Examples are the recent selling from whales and the formation of a so-called “death cross” on the MVRV ratio.

Multiple analysts, though, believe the valuation could head north soon. X user CRYPTOWZRD expects to see more positive price action in the following days, “which will help XRP become strongly bullish and rally towards the $3.65 resistance target.” 

Crypto Rand, who admitted not being an XRP fan, claimed the asset looks ready to explode. 

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BNB Defies Selloffs, Stays Within 30% of All-Time High

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TL;DR

  • BNB trades around $760, maintaining stability while other top cryptocurrencies faced steeper market losses.
  • A rounding bottom breakout puts $745 as key support and potential targets at $790 to $1,000.
  • Institutional players like Nano Labs are adding BNB to treasuries, signaling rising corporate interest.

Price Near Record Levels

BNB changed hands at $760 at press time, with over $1 billion in 24-hour volume. Prices dipped slightly in a day and 9% over the past week. 

In the last 24 hours, BNB traded between $755 and $770. Its seven-day range was $735 to $833. The token is still only 12% below its record high of $858 (CoinGecko data), set on July 28, 2025.

Crypto analyst Crypto Patel pointed out that BNB has outperformed most major altcoins during this market downturn. Many tokens have fallen 60–80% from their peaks, but BNB never slipped beyond 30%. That steadiness keeps it close to record levels while the broader crypto market remains shaky.

Market data tracking the drawdown from all-time highs for top altcoins shows a clear difference. BNB, marked in blue, saw its pullbacks stay between -6% and -30%. XRP ranged from -15% to -38%, while ETH also touched -38%. SOL had the heaviest losses, dropping over 60% from its high.

Interestingly, the numbers show that BNB stayed more stable than its peers. It held its ground during periods where other coins swung sharply lower, giving it a reputation for relative consistency.

Chart Patterns and Future Targets

Analyst Jonathan Carter identified a rounding bottom pattern on the daily chart. BNB broke above the neckline near $745 and is now retesting that level as support. Holding this zone would keep the bullish setup in place.

In case of a resumed momentum, Carter identified potential highs at $790, $850, $900, and $1,000. Volume and the RSI readings indicate that the current rally has taken a breather, and the price is consolidating upon breaking out.

Ecosystem Updates and Institutional Interest

Binance rolled out a web wallet that allows traders to approve transactions for up to seven days and opened bitcoin options writing to all users. Both changes are designed to support active traders and strengthen BNB’s ecosystem.

Corporate interest has picked up as well. CEA Industries, Liminatus Pharma, Windtree Therapeutics, and Nano Labs have all revealed BNB-related plans. Nano Labs said it purchased 128,000 BNB as part of its new treasury strategy.

BNB remains on watch as it retests support and approaches critical resistance zones that could lead to new highs.

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Altseason on Hold? Altcoins Decline as Bitcoin Falls Below Local Support (Bitfinex)

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Over the past three weeks, bitcoin (BTC) has been testing its local range lows near $115,800. Unfortunately, it gave way over the weekend, and the leading cryptocurrency fell to $112,000.

Interestingly, altcoins followed suit, seemingly abandoning the bullish momentum they had ridden during this altseason. This raises the question of whether this decline is just a break in the altseason or the end altogether.

Bitcoin Falls Below Local Support

Bitcoin’s decline follows persistent market weakness amid aggressive speculative risk rotation toward ether (ETH) and other altcoins. According to the latest Bitfinex Alpha report, the move signals a shift in market structure and rising downside vulnerability.

The market’s current condition suggests that speculative appetite is declining across sectors, with cautious sentiment and elevated leverage. Before any catalysts can trigger strong directional momentum, there could be a period of reduced volatility and consolidation. This could be exacerbated as bitcoin’s loss of range support acts as resistance.

Although BTC is struggling and may continue to do so in the meantime, altcoins are having it worse. Despite recent selling pressure, bitcoin’s market cap has remained above $2.2 trillion, accounting for almost double its 2021 cycle peak. ETH and the aggregate altcoin market, on the other hand, have failed to exceed their 2021 highs. This suggests that investors have remained cautious even while rotating their capital into high-beta and less mature assets.

Is Altseason Dead?

Worse still, altcoins performed worse than bitcoin last week. While BTC has fallen just 8.9% from its all-time high, ETH closed last week with a 9.7% plunge. The OTHERS index, which tracks the broader altcoin market aside the top ten, showed that this group of assets closed the week 11.5% in the red. ETH has plummeted 15% from its recent local peak, while the OTHER index is down 18.7% below its cycle high.

Furthermore, the OTHERS index has shed roughly $59 billion in value over the last 11 days, reflecting rapid derisking among investors.

“This contraction signals a clear waning of speculative appetite in the altcoin sector, which had seen a rapid expansion of open interest throughout July, even as BTC remained trapped within a tight trading range,” Bitfinex analysts stated.

Meanwhile, only two large-cap assets are in the green over the last two trading weeks: ENA, the utility token of the synthetic dollar protocol, Ethena, and PENGU, the native asset of the non-fungible token (NFT) project, Pudgy Penguins. Although both assets are up 14.5% and 8.4%, respectively, they are also down from their all-time highs.

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