The CEO of Tether has filed a number of proceedings in China regarding unpaid invoices and tax fines before he launched his "now controversial" stablecoin.
The chief executive of Tether is reportedly to have previously run a company that has faced a number of lawsuits in China before ever launching USDT.
The Use of Stablecoins Like Tether
As crypto is moving into mainstream finances, investors have been heavily relying on stablecoins per the story by Financial Times. Stablecoins are digital tokens backed up by real-world assets.
Wu Blockchain also tweeted out the news, adding a reference to CaliforniaNewsTimes.
Stablecoins provide a solution for investors to trade volatile cryptocurrencies like Bitcoin. Because of this, Tether's role in the whole cryptoverse has blown up ever since its creation in 2014.
According to FT, Tether CEO ran Huashun company, headquartered in Shenzhen, China in 2006. It owes taxes and fines for overdue payments and has been sued many times. Regulators added it to the list of "seriously dishonest and illegal". https://t.co/nJTpCJmE7k
— Wu Blockchain (@WuBlockchain) December 20, 2021
Tether's $78 Billion Scrutinized by Regulators
As of press time, Tether's $78 billion is being scrutinized by regulators. In addition, the company's fast rise also turned the spotlight on Jean-Louis van der Velde, the chief executive of Tether.
A Dutch native,van der Velde's career has included experience in IT sales in Hong Kong, a Chinese electronics manufacturer, and even Germany's software industry.
Legal and corporate records have shown van der Velde's tenure running a company called Huashun Electronics, which is said to be based in Shenzhen, that made products like television receivers and amplifiers before he took control in 2006.
Tether CEO's Fire for Huashun
From 2009, Huashun actually came under pressure from creditors due to the growing number of unpaid bills, according to records from a Chinese court and court orders that were compiled by Tianyancha, a data provider.
One creditor whose companies supplied metal parts to Huashun, Yang Hebing, told the Financial Times that the company was actually poorly managed and has not been able to repay the money.
Yang officially sued both Huashun and van der Velde in 2012 but neither of them have responded as seen in the Shenzhen court records.
Almost one decade later, the CEO, who spent a considerable amount of time in Hong Kong ever since he left the Netherlands in his 20s to attend university in Taiwan, still technically owned Huashun through an offshore entity that was called Perpetual Action Group Inc, or PAG Asia as shown by the Chinese government records.
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Huashun Still Owns Tether
The entity, as of the moment, also owns a share of Tether itself, according to official documents. To add, Huashun's business in China currently appears mostly defunct and regulators have added it to the list of "seriously untrustworthy and law violating" companies. per government records.
As of the moment, van der Velde still helps oversee tens of billions of Tether assets. Tether issues an eponymous token known as USDT which is supposedly pegged to the US dollar through supposed reserves.
The token is registered in the British Virgin Islands
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Written by Urian B.
