“We have a 99% profit margin. There is no other company in the world that has that,” said Paolo Ardoino, CEO of stablecoin issuing company Tether. The bold claim comes along with an even more ambitious forecast: Tether expects to generate $15 billion in profits by year-end.
To put that in perspective, Tesla’s (NASDAQ: TSLA) net profit fell by 37% year-over-year in its recent quarterly reports, while Apple Inc.’s (NASDAQ: AAPL) net profit rose about 9% year-over-year in its last quarter. By comparison, Tether’s staggering margin would eclipse nearly every major Wall Street firm.
Not exactly. To start with, Tether operates in a regulatory gray zone. The company issues USDT, the world’s largest stablecoin pegged 1:1 to the U.S. dollar. But since it is headquartered in El Salvador, it is not bound by U.S. auditing or disclosure requirements, unlike Tesla or Apple.
However, the company does release “attestations,” or periodic snapshots prepared by a third-party accounting firm that confirm the assets and liabilities at a specific moment in time.
Critics say these attestations fall short of full, independent audits, leaving questions about the company’s true financial health.
In fact, in 2021, the company was even fined by the Commodity Futures Trading Commission (CFTC) for misrepresenting its stablecoin reserves.
On Oct. 24, Ardoino sat down with Bloomberg during the Plan B Forum in Lugano, Switzerland, where he predicted that the company’s profits would reach $15 billion.
“This year we’re going to approach another $15 billion profit. That’s very rare,” Ardoino said.
Tether’s reported profit in the previous year was $13 billion.
The prediction follows reports of a potential $20 billion fundraising round in exchange for a roughly 3% stake in the company. Such a deal would value Tether at around $500 billion.
Meanwhile, USDT’s supply has also surged to $182 billion, cementing Tether’s dominance in the stablecoin market.
Related: Tether appoints former White House crypto director Bo Hines as strategic advisor
The rumored fundraising round has fueled speculation that Tether could be preparing for an eventual initial public offering. However, Ardoino has consistently denied any plans for a public listing, a path Tether’s peer stablecoin issuer Circle took, which went public in June.
When asked about potential investors, Ardoino declined to name any specific parties.
“There are many funds and tech funds that have in their portfolio many companies that could use part of our technology and other offerings that we have. It’s about synergy and creating bigger impact,” he told Bloomberg.
