Stuart Hoegner’s Retirement Sparks Tether’s Leadership Shuffle Amid EU Regulatory Uncertainty
Update (Jan. 3, 2:20 am UTC)
This article has been updated to reflect that Stuart Hoegner’s retirement is a separate event from the implementation of MiCA and also adds related news about Tether.
A New Era for Tether’s Legal Leadership
Stuart Hoegner, who served as the general counsel of Tether and Bitfinex, has announced his retirement from his role as legal chief at the two firms. He will be replaced by Michael Hilliard, who has been working alongside Hoegner for several years.
Tether’s Statement on Stuart Hoegner’s Retirement
In a Jan. 2 statement shared with Cointelegraph, Tether wrote that Hoegner had retired and would be replaced as general counsel by Tether’s current legal counsel.
"Michael’s deep understanding of both companies’ operations, coupled with his strategic approach to legal and regulatory challenges, has been critical to advancing both Tether and Bitfinex’s mission," the firm stated.
The Uncertain Future of USDT in Europe
The change in legal leadership for Tether comes amid the implementation of MiCA in Europe, which officially took effect on Dec. 30. The MiCA regulations have left stablecoin issuers like Tether in limbo, with the rules not clearly stating whether the firm’s US Dollar-pegged stablecoin (USDT) complies with the new EU crypto framework.
"No regulators have explicitly stated that USDT isn’t compliant, but this does not mean that it is," Juan Ignacio Ibañez, a member of the Technical Committee of the MiCA Crypto Alliance, told Cointelegraph in a Dec. 29 report.
Related Developments
In October 2024, the European Securities and Markets Authority (ESMA) — a key supervisor of MiCA compliance — declined to tell Cointelegraph whether USDT was seen as a restricted stablecoin under MiCA. A spokesperson at ESMA then said that the regulator was working with market participants and other stakeholders to address stablecoin-related issues presented in MiCA.
While there has been murky guidance on the matter of Tether’s legal status in Europe, US crypto exchange Coinbase delisted USDT in mid-December, citing compliance with MiCA. Despite this move, the stablecoin has continued trading across the EU, with many exchanges still awaiting further clarity from European authorities on USDT’s compliance with MiCA.
Market Cap Consequences
USDT’s market cap fell from $138.8 billion on Dec. 30, 2024, to a weekly low of $136.9 billion on Jan. 1, according to CoinGecko data. This marked the USDT market cap’s biggest dip since the FTX collapse in November 2022. Its current market cap of $137.2 billion is 2.75% off its all-time high of $141 billion set on Dec. 20, 2024.
The Impact of Tether’s Market Cap
Despite the fall, USDT stablecoin dominance still sits above 65% in what has become a $210 billion market. This underscores the significant influence that USDT continues to exert over the cryptocurrency landscape.
Tether’s Bitcoin Reserves
Also on Dec. 30, Tether moved almost $780 million worth of Bitcoin into its corporate Bitcoin reserve in its largest move since March. Tether said in May 2023 that it planned to "regularly allocate up to 15% of its net realized operating profits toward purchasing Bitcoin."
What’s Next for USDT?
As the regulatory landscape in Europe continues to evolve, the future of USDT remains uncertain. Will European authorities provide clarity on the stablecoin’s compliance with MiCA, or will Tether be forced to adapt its business model to meet the new EU regulations?
Only time will tell, but one thing is certain: the retirement of Stuart Hoegner and the implementation of MiCA have created a perfect storm of uncertainty for USDT.
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