Binance’s stablecoin BUSD’s loss is Tether’s gain. According to Reuters, the biggest stablecoin by market capitalization has seen its share of the overall stablecoin market rise to 52.6% from 51% earlier. The USD Coin is also a beneficiary of BUSD’s fall. The Circle-issued token witnessed a 0.4% increase in its market share to 31.3% after investors fled BUSD.

The shuffling around of market share among stablecoins, however, may not mean much for crypto markets, according to Vetle Lunde, analyst at Arcane Research. He said enforcement action against USDC or USDT could have more “dramatic implications” for the ecosystem.

A Dramatic Denouement?

The stage for those implications is already being set in crypto markets. Tether’s share of the overall bitcoin trading volume at Binance, the world’s biggest exchange by trading volume, has jumped to almost 30% from 21% at the end of December. That jump has corresponded with an increase in Tether supply in crypto markets. Tether-margined derivatives are proliferating across exchanges.

All of this is bad news for Bitcoin and its price. Tether is a minefield of risks and controversies. And these are precarious times for crypto. The Securities and Exchange Commission (SEC) has taken to cracking its regulatory whip on crypto products with increased frequency, meaning the dangers to Tether might have increased.

In the press release accompanying its latest attestation report, the stablecoin said it had generated profits of $700 million. While Tether did not divulge the source of its profits, its declaration is tantamount to an admission that its stablecoin is a security that enables profits. It leaves the door open for regulators to pounce upon USDT for violating U.S. securities laws. If that happens, the dramatic implications referred to by Lunde could bring down the rickety crypto edifice of worthless tokens.