Crypto giant Tether seeks US$500 billion valuation in major raise

[KUALA LUMPUR] Tether Holdings, issuer of the world’s largest stablecoin, is in talks with investors to raise as much as US$20 billion, a deal that could propel the crypto firm into the highest ranks of the world’s most valuable private companies.

The El Salvador-based company is seeking between US$15 billion and US$20 billion in exchange for a roughly 3 per cent stake through a private placement, according to two sources familiar with the matter.

Another source involved in the process cautioned that those are top-end targets, and eventual numbers could be significantly lower. Talks are in early stages and details of the proposed investment may change, said the sources, who were not authorised to speak publicly.

Depending on the stake offered, the deal could value the company at around US$500 billion, putting it into the same league as OpenAI and Elon Musk’s SpaceX, an extraordinary achievement for the lightly regulated crypto business, even as rivals multiply and falling US interest rates threaten its windfall earnings. Its closest direct rival, publicly traded stablecoin issuer Circle Internet Group, was worth about US$30 billion as at Tuesday (Sep 23) afternoon.

The transaction would involve new equity rather than existing investors selling their stakes, said the sources. Cantor Fitzgerald is acting as the lead adviser, they added.

Bo Hines, Tether’s strategic adviser for digital assets and US strategy, said that Tether has no plans to raise money during an interview at a conference in Seoul on Tuesday. Other representatives for Tether did not provide a comment. A spokesperson for Cantor declined to comment.

Tether is at the forefront of stablecoins, a type of digital asset that pegs its value to fiat currencies. Its USDT token is tied to the US dollar with a market value of US$172 billion. It is by far the largest, with Circle’s No 2-ranked USDC stablecoin worth about US$74 billion.

Tether has made a fortune by parking the reserves that back its token in cash-like assets, including US Treasuries, and earning interest. It booked US$4.9 billion in profit during the second quarter, according to a company blog post in July. Chief executive officer Paolo Ardoino recently claimed Tether has a 99 per cent profit margin. The figures Tether cites are not subject to the same reporting standards as those disclosed by publicly traded companies.

Tether has spent the last few months laying the groundwork to return to the US, in a bid to capitalise on US President Donald Trump’s pro-crypto policies. It recently unveiled a plan for a US-regulated stablecoin and appointed Hines, a former White House crypto official, to lead it.

SEE ALSO

Tether had been notably absent from the US prior to Trump’s second term, after clashing with regulators. In 2021, the company paid a US$41 million fine to settle allegations it had misrepresented its reserves.

Prospective investors have been given access to a data room over the past few weeks to decide whether to participate in the new fundraising, said the sources familiar with the matter. They expect the deal to close by the end of the year. BLOOMBERG