Tether Scales Back $20B Funding Push After Investor Resistance: Report

Tether Holdings Ltd., the issuer of the world’s largest stablecoin, USDT, has reportedly been forced to scale back an ambitious private funding round initially targeting $20 billion, following significant pushback and skepticism from major institutional investors. The proposed capital raise was intended to fund Tether’s aggressive diversification strategy, focusing heavily on expanding its ventures into Bitcoin mining infrastructure, renewable energy projects, and developing artificial intelligence (AI) data centers.

Sources familiar with the matter indicate that potential investors were wary of the high valuation sought by Tether, as well as the ongoing regulatory scrutiny faced by stablecoin issuers globally. Concerns over the company’s transparency model, which differs significantly from traditional financial institutions, were cited as a primary deterrent to committing large sums of institutional capital.

The original $20 billion target reflected Tether’s confidence built upon years of substantial profit generation from its reserve holdings, predominantly U.S. Treasury bills. However, the market’s response has necessitated a substantial reduction in the funding goal. The exact revised figure has not been publicly disclosed, but the adjustment underscores the difficulty even highly profitable crypto entities face when trying to attract massive institutional investment accustomed to higher levels of traditional regulatory oversight. Despite this setback in external financing, Tether maintains that its internal capital reserves are sufficient to continue driving its strategic expansion plans.

Source: Tether Scales Back $20B Funding Push After Investor Resistance: Report