Stablecoin Tether promotes tech chief to CEO, taking over from mysterious crypto leader
A picture taken in London shows gold-plated souvenir cryptocurrency tether, bitcoin and ethereum coins arranged beside a screen displaying a trading chart, May 8, 2022.
Justin Tallis | Afp | Getty Images
Paolo Ardoino, the chief technology officer for Tether, has been promoted to CEO of the stablecoin company, in a surprise move. Ardoino will take the reins from Jean-Louis van der Velde, a secretive crypto executive and entrepreneur, who has for years been the company’s boss.
In a press release Friday, Tether said that Ardoino will lead Tether from December 2023, succeeding van der Velde. Van der Velde will take up a new advisory role at Tether while still holding the position of CEO at Bitfinex, a crypto exchange that is closely associated with Tether and operated by the same Hong Kong-based parent company, Ifinex.
Ardoino will still serve as Tether’s chief technology officer while taking on his additional duties as CEO, Tether said. He will also continue serving as the chief strategy officer of Holepunch, a peer-to-peer communications network launched by Tether, Bitfinex and infrastructure platform Hypercore.
Ardoino first became involved in crypto when he joined Bitfinex in 2014. He joined Tether as chief technology officer in 2017.
Tether is one of the largest stablecoin operations in the world. Its USDT token, which aims to maintain a one-to-one peg to the U.S. dollar, is the biggest stablecoin by market value with more than $80 billion worth of tokens currently in circulation. Stablecoins are a vital part of the crypto market that help traders move in and out of digital tokens, anywhere in the world, around the clock.
In a statement, Tether’s van der Velde said that Ardoino is “extremely well-suited to lead Tether,” adding: “I believe Tether is poised to continue its rapid growth, with a continued focus on emerging markets and transformative technology.”
The departure of van der Velde, an executive who has barely ever appeared in public, comes as Tether has faced scrutiny over transparency. Many market observers had pointed to the lack of the former CEO’s public facing attitude as a sign Tether is not transparent.
Ardoino has for years effectively been the face of Tether. He has held multiple interviews with the media and appeared on podcasts, often to defend his company and its associated USDT token from scrutiny.
In a CNBC interview at the Money 20/20 conference in Europe in Amsterdam earlier this year, Ardoino said the company would release a full audit “eventually.”
“We’re working on it,” he added.
Explaining why the company had not yet completed a full audit already, Ardoino said this is because none of the big four auditing firms were willing to work with an industry that lacks regulation. While regulations are coming into place around the world for crypto, there is still no all-encompassing framework for the industry in place.
That is soon set to change with the EU’s Markets in Crypto Assets (MiCA) regulation around the corner. This would require stablecoins to keep a certain level of assets including more quality assets in their reserves, as well as publicly disclose their reserves. However, MiCA won’t fully apply until December 2024.
Van der Velde, on the other hand, has largely operated in the shadows, helming Tether without appearing in public much or speaking to the press.
Tether ran into a major controversy last year following the collapse of a rival stablecoin called TerraUSD, or UST. UST’s price fell to zero after crypto investors flocked out of the coin en masse due to fears over its backing.
Not long after then, Tether’s USDT also began to deviate from its U.S. dollar peg, stoking concern over whether it was truly fully backed by dollars. That led to calls for Tether to increase transparency and run a full audit of the reserves behind USDT.
For its part, Tether said that its coin is always backed by dollars and dollar-equivalent assets including government bonds. Tether is also backed by other assets, including crypto tokens like bitcoin, and even gold.
Tether’s reserves rose to more than $86 billion in the three-month period from April to June. During that quarter, the company also says it booked a profit of more than $1 billion, up 30% quarter-over-quarter.
The company is sitting on a stockpile of U.S. Treasury bills, which are currently yielding about 4.6%. Tether makes money from various fees, and issuing loans to other institutions, and investments in digital tokens and precious metals.
In 2021, Tether settled with the New York Attorney General’s office for $18 million over claims that it and sister company, Bitfinex, had moved hundreds of millions of dollars to cover up the apparent loss of $850 million of commingled client and corporate funds.
As part of the settlement, Tether agreed to offer frequent quarterly reports detailing its reserves.
Tether continues to face sharp regulatory scrutiny. The U.S. Department of Justice is reportedly investigating Tether executives over allegations that they committed bank fraud in the early days of running the company, according to Bloomberg.
– CNBC’s Arjun Kharpal contributed to this report
WATCH: How a $60 billion crypto collapse got regulators worried
The Texas Instruments headquarters in Dallas, Texas, on Jan. 21, 2024.
N. Johnson | Bloomberg | Getty Images
Texas Instruments reported second-quarter results on Tuesday that beat analysts’ expectations for revenue and earnings. But the stock fell in extended trading due to a third-quarter forecast that missed estimates.
Here’s how the chipmaker did versus LSEG consensus estimates:
- Earnings per share: $1.41 vs. $1.35 expected
- Revenue: $4.45 billion vs. $4.36 billion expected
Texas Instruments said it expects current-quarter earnings between $1.36 and $1.60 per share, while analysts were looking for $1.50 per share. The company forecast revenue of $4.45 billion to $4.8 billion, for a midpoint of $4.625 billion. Analysts were expecting revenue of $4.59 billion.
Revenue increased 16% in the second quarter from $3.82 billion in the same period a year earlier. Sales in the company’s analog chip business, its largest, rose 18% to $3.5 billion, surpassing the StreetAccount estimate of $3.39 billion for the segment.
Net income rose 15% to $1.3 billion, or $1.41 per share, from $1.13 billion, or $1.22 per share, a year ago.
Texas Instruments is a key supplier of legacy semiconductors for automotive and industrial uses.
As of Tuesday’s close, Texas Instruments shares were up 15% for the year on broader market optimism for chips. In June, the company said it would spend $60 billion to expand chipmaking factories in Texas and Utah, a move that was praised by the Trump administration in its push to bring more technology manufacturing to the U.S.
Amazon logo on a brick building exterior in San Francisco on Aug. 20, 2024.
Smith Collection | Gado | Archive Photos | Getty Images
Amazon plans to acquire wearables startup Bee AI, the company confirmed, in the latest example of tech giants doubling down on generative artificial intelligence.
Bee, based in San Francisco, makes a $49.99 wristband that appears similar to a Fitbit smartwatch. The device is equipped with AI and microphones that can listen to and analyze conversations to provide summaries, to-do lists and reminders for everyday tasks.
Bee CEO Maria de Lourdes Zollo announced in a LinkedIn post on Tuesday that the company will join Amazon.
“When we started Bee, we imagined a world where AI is truly personal, where your life is understood and enhanced by technology that learns with you,” Zollo wrote. “What began as a dream with an incredible team and community now finds a new home at Amazon.”
Amazon spokesperson Alexandra Miller confirmed the company’s plans to acquire Bee. The company declined to comment on the terms of the deal.
Amazon has introduced a flurry of AI products, including its own set of Nova models, Trainium chips, a shopping chatbot and a marketplace for third-party models called Bedrock.
The company has also overhauled its Alexa voice assistant, released more than a decade ago, with AI capabilities as Amazon looks to chip away at the success of rivals such as OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini.
Ring, the smart home security company owned by Amazon, has also looked to introduce generative AI in some of its products.
Amazon previously experimented in the wearables space through a health and fitness-focused product called Halo. It sunset the Halo in 2023 as part of a broader cost-cutting review.
Other tech companies have launched AI-infused consumer hardware with mixed success.
There’s the Rabbit R1, a small square gadget that costs $199 and uses an OpenAI model to answer questions, as well as the AI pin developed by Humane, which later sold to HP.
Meta‘s Ray-Ban smart glasses have grown in popularity since the first version was released in 2021.
OpenAI in May acquired Jony Ive‘s AI devices startup io for roughly $6.4 billion. The company reportedly plans to develop a screen-free device.
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