Tether Slams JPMorgan Over ‘Salty’ Bitcoin Report, Dismisses Sell-Off Claims

U.S. Stablecoin Legislation Could Force Tether to Adjust Reserves?

JPMorgan analysts have raised concerns over Tether’s compliance with upcoming U.S. stablecoin regulations, suggesting that the company may be forced to sell off its Bitcoin reserves to meet stricter reserve requirements. Led by Nikolaos Panigirtzoglou, the analysts estimate that only 66% of Tether’s reserves align with the STABLE Act and 83% with the GENIUS Act. 

The proposed legislation, if enacted, would require stablecoin issuers to hold only highly liquid assets such as U.S. Treasury bills, insured bank deposits, and central bank reserves, prohibiting holdings in Bitcoin, precious metals, corporate paper, and secured loans. Given Tether’s substantial Bitcoin reserves, JPMorgan warns that a large-scale sell-off could disrupt Bitcoin’s market stability.

Tether, which holds over $20 billion in liquid assets and generates more than $1.2 billion in quarterly profits primarily from U.S. Treasury investments, has dismissed JPMorgan’s report as biased. 

CEO Paolo Ardoino ridiculed the analysts on X, stating, “JPM analysts are salty because they don’t own Bitcoin,” while Tether’s spokesperson accused JPMorgan of failing to grasp Bitcoin’s role in the market. The company maintains that compliance with potential new U.S. regulations would not require any drastic asset liquidations, challenging the assertion that it would be forced to sell Bitcoin.

The regulatory pressure comes amid a broader legislative push to define stablecoin reserve requirements. The GENIUS Act, introduced by Senator Bill Hagerty and co-sponsored by Senate Banking Committee Chair Tim Scott, Senators Kirsten Gillibrand, and Cynthia Lummis, offers slightly more flexibility in reserve structuring. 

In contrast, the STABLE Act, backed by House Financial Services Committee Chair French Hill and Representative Bryan Steil, mandates that issuers hold only insured deposits, U.S. Treasuries, and short-term Treasury repos. If these requirements are enforced, Tether would need to adjust its holdings to remain compliant, but the company insists that it already holds sufficient qualifying reserves.

Despite ongoing scrutiny, Tether remains the dominant stablecoin issuer, commanding nearly 60% of the market, with a USDT market cap of nearly $142 billion and a daily trading volume of $32.8 billion as of February 2025. 

However, regulatory history has cast a long shadow over the company. In 2021, the New York Attorney General found that Tether had misrepresented USDT’s backing, resulting in an $18.5 million fine and a ban on operations in New York. 

Since then, Tether has attempted to improve transparency through quarterly attestation reports and cooperation with law enforcement on freezing suspicious funds. With Howard Lutnick, Donald Trump’s nominee for Commerce Secretary, advocating for stablecoin reserve audits, future government oversight could require Tether to disclose more financial details.

Beyond regulatory challenges, Tether continues to expand its influence in the crypto market by integrating with Ethereum’s Layer 2 protocol, Arbitrum. The company launched USDT0 in mid-January 2025, an omnichain fungible token using LayerZero’s OFT standard, mirroring PayPal’s PYUSD. 

Arbitrum now serves as the central hub for USDT transactions across multiple networks, including Ethereum, Tron, Ton, Ink, and Berachain, ensuring deep liquidity without relying on traditional blockchain bridges. This move bolsters USDT’s role as the most widely used stablecoin and reduces exposure to risks associated with wrapped assets.

Tether has also made significant strides in blockchain interoperability. In January 2025, it expanded USDT support to Bitcoin’s Lightning Network, further increasing adoption. Financially, the company has posted record-breaking profits, generating $13 billion in 2024, the highest in its history. With increased exposure to U.S. Treasuries and strategic expansion into multiple blockchain ecosystems, Tether is reinforcing its market position despite the looming specter of regulatory enforcement. 

However, as global lawmakers push for stricter stablecoin oversight, potential mandates for government audits could reshape the stablecoin landscape, testing Tether’s resilience against the evolving regulatory environment.

This article has been refined and enhanced by ChatGPT.