Tether Holdings SA is weighing share tokenization and buybacks to control investor liquidity as it pursues a stock sale valuing the firm near $500 billion.
Tether Steps In To Block Discounted Share Sales
Bloomberg reported on Friday that Tether (CRYPTO: USDT) executives moved to halt plans by at least one existing shareholder to sell stock at a steep discount.
People familiar with the matter said one investor sought to offload at least $1 billion worth of shares, implying a valuation of about $280 billion, well below the level targeted in Tether's fundraising.
Tether’s management was concerned such transactions could undermine a broader capital raise expected to reach $20 billion.
"It would be imprudent, and indeed reckless, for any investor to attempt to circumvent the established process," Tether said.
Tokenized Shares Emerge As A Controlled Exit Option
One option under discussion involves digitally representing Tether shares on a blockchain through tokenization.
That approach could allow controlled liquidity without opening the door to unrestricted secondary trading.
Tokenization has gained traction across markets for faster settlement and lower transaction costs.
Galaxy Digital, Kraken, and Robinhood have all tested tokenized equity products in recent months.
Tether launched its own tokenization platform, Hadron, in November 2024.
The platform supports digital representations of assets including stocks, bonds, and commodities.
Buybacks Offer Another Pressure Valve
Executives are also considering share buybacks to provide exits for early investors and employees.
This model has become more common among large private fintech and cryptocurrency firms.
Ripple (CRYPTO: XRP) said it has repurchased more than 25% of its outstanding shares in recent years.
Revolut recently offered to buy back employee shares at a 30% discount to its latest fundraising valuation of $75B, the Financial Times reported.
Tether has not set a timeline for an initial public offering.
That uncertainty could leave investors waiting years for liquidity without alternative mechanisms.
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