Tokenization Trends: Tether’s Soft Serve and Macaron Strategy
Exploring tokenized assets, compliance jargon, and why Tether’s website terms might be overcooked.
My Discord news bot was buzzing with excitement when the news hit the wire: Tether is going big on tokenization: Hadron by Tether. So, what can we expect from it?
“With its seamless and intuitive interface, the platform promises to let users easily tokenize stocks, bonds, commodities, funds, and reward points. This supposedly opens up new opportunities for individuals, businesses, and even nation-states to raise funds using tokenized collateral.”
But what can we actually learn from this announcement about tokenization? Not much—beyond the convictions of one particular company. Let’s break it down, starting with the basics:
“A tokenized asset is a digital asset, or token, on a blockchain, symbolizing ownership or rights over a physical or digital asset.”
A tokenized asset is… a token? That definition feels less comprehensive than one might hope. What about a digital tokenized asset token? It’s a bit of a tongue-twister, but let’s move on to the more intriguing part: symbolizing ownership.
If you buy a house and receive a deed from the land registry, would you consider this document to be a symbol of your house? Not really. So, what’s the distinction between evidencing ownership and symbolizing ownership?
An NFT, for example, might signify ownership, as its value is deeply tied to the community’s recognition and perception of the asset's worth. However, it’s questionable whether the token itself serves as legally binding evidence of ownership. It’s one thing to symbolize value within a particular ecosystem; it’s another for that symbol to carry enforceable rights in the broader legal framework.
If I were to invest in tokenized securities, I’d hope they could be structured to achieve more than simply symbolizing ownership. They need to bridge the gap between representing value and holding substantive, enforceable claims.
“Our comprehensive KYC, KYB and KYT platforms provide the tools needed to meet compliance obligations.”
Did you know you needed KYB (Know Your Business) and KYT (Know Your Transaction) services? I suppose that’s what they mean by this. For reasons I struggle to understand, KYB is often treated as a separate process from KYC, focusing on the verification of companies and their structures. However, since sanctions and regulatory scrutiny ultimately target individuals—whether they are beneficial owners, directors, or decision-makers—the distinction between KYB and KYC feels absurd. KYB might be better understood as a process to identify the individuals behind a corporate façade, but this activity clearly falls within the broader scope of KYC.
KYT?
AML (Anti-Money Laundering) regulations require KYC (Know Your Customer) for onboarding and identity verification, alongside transaction screening and transaction monitoring to detect suspicious activities. However, KYT (Know Your Transaction) is a term that has emerged as crypto and fintech jargon, often conflating or overlapping with transaction monitoring and screening. It’s not officially codified in AML regulations like KYC. Honestly, we already have enough jargon—there’s no need to invent more, especially when it’s as confusing as this.
If you click through you can find the process “Tokenize in 4 Steps”:
Sign up on Hadron by Tether and complete the KYC process
Connect your non-custodial wallet and create token
Offer your tokenized assets to potential clients (distribution)
Issue tokens
They also mention some compliance templates to make this process sound very straightforward. However, if one is engaging in a regulated activity such as the distribution of securities, the outlined steps are likely the least of your worries from a technical perspective. Operating something like this in line with legal and regulatory requirements probably involves a few more steps.
And here’s where it gets interesting. Tether’s artwork features an emerald wormhole showcasing the kinds of assets that seem to be top of mind for them when it comes to tokenization: macarons, soft-serve ice cream, or a T-shirt with a Tether logo. I can fully get behind the idea of tokenizing such “assets” in four steps, though I must admit the soft-serve token gives me pause—because a buy-and-hold strategy might leave you with a token that’s, well, literally melted away.
Let’s see, here is what the sign up screen says:
Which assets are you interested in issuing?
Bonds: Ok.
Stablecoins: Ok.
Loyalty Points: Ok.
Securities: Bonds are also securities, so… securities but not bonds?
Capital Raise: Hmm, not bonds, not securities—loans?
Commodities: Issuing commodities? If I had a gold mine, does this mean I’m in the business of issuing gold?
Sovereign Debt: These are bonds and securities, by the way. But I commend their confidence.
Tether’s Website terms are one of a kind. They read like an exercise in legal maximalism: everything is public, but nothing is guaranteed; everything is accessible, but only under strict conditions. It's a curious approach for a platform aiming to be at the cutting edge of the "digital asset revolution."
8.1 You may only use the Site for general informational purposes, on a non-reliance basis, in accordance with these Terms. [..]
Unless otherwise indicated, we are the owner or licensee of all content or, material published on, the Site. [..]
If you print, copy, download, share or repost any part of our Site in breach of these terms of use, your right to use our Site will cease immediately, and you must, at our option, return or destroy any copies of the materials you have made.
OK, but we’re talking about a publicly available website with generic guidance on how to tokenize a macaron. How exactly does Tether plan to enforce these terms? Will they track down every user who dares to share a screenshot or quote their content?
For a platform ostensibly at the forefront of innovation, it seems their focus on control over public content is misplaced—especially when the content itself is hardly revolutionary. Legal overreach for macarons, soft-serve ice cream, and T-shirt tokens? It’s a curious hill to die on.
But the terms of their existing service should make this no surprise:
No Representations & Warranties by Tether:
Tether makes no representations, warranties, or guarantees to you of any kind. The Site and the Services are offered strictly on an as-is, where-is basis and, without limiting the generality of the foregoing, are offered without any representation as to merchantability or fitness for any particular purpose.
It’s the legal equivalent of shrugging and saying, “Good luck!” For a platform dealing with sensitive digital assets and high-stakes services, this is a curious stance. Imagine if an airline said, “We can’t promise you that the aircraft is fit for purpose. Ready for boarding?”
The “We Take No Responsibility” Clause
Tether’s limitation of liability section is a sweeping declaration that they are not liable for anything—even if the loss is due to their own negligence. Here are some highlights from this impressive legal gymnastics routine:
No Responsibility for Accuracy:
They won’t be liable for “any inaccurate, misleading, or incomplete statement” on their platform, whether caused by their negligence or otherwise (14.4).No Accountability for Service Failures:
Any “failure, delay, malfunction, interruption,” or even decisions that interfere with your rights (14.5) are completely on you.No Liability for Loss of Backing Assets:
If the reserves backing Tether tokens are lost due to insolvency, theft, or legal seizures (14.8), it’s not their problem.
That leaves me speechless—and trust me, that doesn’t happen too often. It’s the ultimate legal paradox if it wasn’t for this:
The “We’re Not Advising, But You’d Better Know Everything” Clause
Their terms say this:
Tether does not provide any investment advice or advice on trading techniques, models, algorithms, or any other schemes.
And it refers to a risk disclosure which is also applicable
The legal status of certain Digital Tokens may be uncertain. This can mean that the legality of holding or trading them is not always clear. Whether and how one or more Digital Tokens constitute property, or assets, or rights of any kind may also seem unclear. Participants are responsible for knowing and understanding how Digital Tokens will be addressed, regulated, and taxed under applicable law. [..] As with all investments, there is a risk of loss in owning Tether Tokens.
Tether’s terms essentially say: "We don’t give advice, and good luck figuring out if what you’re doing is even legal." Genius!
Crypto was supposed to be the antithesis of centralized control—a system built to empower individuals by bypassing gatekeepers and offering censorship resistance. Yet, reading Tether’s terms of service feels more like entering a corporate dictatorship than a decentralized utopia.
Tether’s terms leave the door wide open for them to use in-kind redemptions. Instead of giving you €100 in actual cash, they could hand over “€100 worth” of assets they decide are equivalent—but who gets to determine the value of those assets? Tether does.
Let’s imagine the scenario:
You redeem €100 worth of EURT. Instead of getting cash, you receive shares of “Hadron by Tether AG”, an asset backed by who-knows-what.
Tether values each share at €1,000 (because, conveniently, they alone determine its worth). So, they hand you 0.1 fractionalized shares—wrapped up in token form, of course—using their Hadron by Tether system.
But wait! That system isn’t actually in production yet, so for the moment, your redemption means… you owe them €900.
Tether’s terms are packed with clauses that strip away user agency. From disclaiming all responsibility to unilaterally deciding what they will or won’t support (like blockchain forks), Tether reserves all the power while leaving users to fend for themselves. The disclaimers about “No Advice” and “Legal Risk” place the entire burden on users to navigate the murky waters of regulation, legality, and tax compliance. They hold total control while offering zero accountability.
Does this sound like freedom to you—or more like an authoritarian manifesto?
The term "hadron" originates from particle physics and refers to a type of subatomic particle. Interestingly, the word "hadron" literally translates to "thick" or "stout" from the Greek word hadros (ἁδρός), a reference to the relative "heaviness" or "density" of hadrons compared to other subatomic particles. It's an odd choice of term, especially if the goal is to project innovation and ease. The literal interpretation of "thick" leaves plenty of room for playful critique—particularly given their focus on tokenizing macarons and soft-serve ice cream! But I’ll leave that to your imagination.