Tether: A History of the World's Largest Stablecoin

The precursor to Tether, originally named Realcoin, was announced in July 2014 as a Santa Monica-based startup by co-founders Brock Pierce, Reeve Collins, and Craig Sellars. The project aimed to create a cryptocurrency whose value was pegged to traditional fiat currencies, initially launching on the Bitcoin blockchain using the Omni Layer protocol.

The first Realcoin (Tether) tokens were issued on the Bitcoin blockchain, representing the first stablecoin pegged to the U.S. dollar. On November 20, 2014, the project was renamed to "Tether" and entered private beta, supporting tokens for U.S. dollars, euros, and Japanese yen.

The cryptocurrency exchange Bitfinex enabled trading of Tether on its platform, establishing the close operational relationship between Tether Limited and Bitfinex that would later become a focus of regulatory scrutiny. Both companies are owned by iFinex, a British Virgin Islands-based entity.

Approximately USD 31 million worth of USDT tokens were stolen from Tether in a security breach. Tether responded by suspending trading and executing a "hard fork" of the Omni Layer protocol to render the stolen tokens untradeable. The hack raised early questions about Tether's operational security and token management.

New York Attorney General Letitia James filed a lawsuit against iFinex, the parent company of Tether Limited and Bitfinex, alleging that Bitfinex lost access to USD 850 million entrusted to payment processor Crypto Capital Corp and used Tether's reserves to cover the shortfall. The lawsuit triggered years of legal battles over Tether's reserve transparency.

Tether surpassed Bitcoin to become the most traded cryptocurrency globally by trading volume, holding the position for the highest daily and monthly trading volume of any cryptocurrency on the market. The milestone reflected Tether's critical role as the primary quote currency in cryptocurrency markets worldwide.

iFinex, Bitfinex, and Tether Limited settled the legal dispute with the New York Attorney General's office, paying USD 18.5 million without admitting any wrongdoing. The settlement ended a two-year legal battle but did not resolve broader questions about Tether's reserve composition and transparency practices.

The U.S. Commodity Futures Trading Commission (CFTC) fined Tether Limited USD 41.6 million for inaccurately claiming that USDT was fully backed by U.S. dollars. The CFTC found that Tether only maintained full fiat reserves during 27.6% of the days between 2016 and 2018, with the remainder backed by a combination of commercial paper, secured loans, and other assets.

Tether started releasing quarterly attestations by accounting firm BDO Italia, providing snapshots of its reserve composition. The attestations revealed that Tether held a significant portion of its reserves in U.S. Treasury bills, cash, and cash equivalents, gradually shifting away from commercial paper in response to earlier criticism.

KPMG announced it would conduct Tether's first full financial audit, a significant step forward in transparency for the stablecoin issuer. In August 2026, Tether stated that KPMG had completed the audit and issued an unqualified opinion on its financial statements, though Tether did not publicly release the full audit report.

Tether completed the relocation of its global headquarters to El Salvador, which had adopted Bitcoin as legal tender in 2021. The move coincided with Tether reporting a record profit of USD 13 billion for 2024 and its USDT supply surpassing USD 140 billion across multiple blockchains.