‘Tether does have the billions it promised’
Stablecoin Tether (USDT) does have the fiat reserves equal to the value of tokens in circulation. That’s what news agency Bloomberg claims based on bank statements dated from September 2017 till July 2018. Currently there’s over 1.8 billion dollars worth of USDT on the market, each USDT is backed by an actual dollar.
The news agency didn’t get full insight into the finances on Tether, but the documents are the most revealing that have ever been made public. One statement shows there was 2.2 billion dollar on Noble Bank in January 2018, when there were 2.195 billion USDT. These numbers also match up in September and October 2017.
There’s has been a lot of money moving around. Tether had banks on the Bahamas, in Puerto Rico and in Taiwan. As a result there’s not a clear trail of those billions of dollars, but each time a Tether is created it was recorded on the bitcoin blockchain. That’s the information that Tether Ltd. provided to the U.S. Commodity Futures Trading Commission.
“The U.S. Commodity Futures Trading Commission (CFTC)?”, you’re asking? Currently there’s still a major investigation from the CFTC going on. They wondered whether Tether was really backed by the US Dollar. They didn’t conclude their research into Tether Ltd. and sister-company Bitfinex yet, and therefore are not willing to comment on the case.
According to Bloomberg it’s hard to determine the actual status of the money at this very moment. Bitfinex and Tether Ltd. did run in some banking issues lately, with Noble Bank closing its doors over allegations of fraud. The bank statements in possession of the news agency do suggest Tether Ltd. had the necessary money all along, and that would mean that all the negative news surrounding the stablecoin could’ve been avoided.
But, that’s not the end of the story, as there’s also another investigation into the role of Tether Limited in the massive price rally of bitcoin from last year. The company went up in value from $10 million in the beginning of 2017 to $1.3 billion at the end of the year, perhaps Tether is guilty of market manipulation.
Tether came into trouble this October when there were serious doubts about the stablecoin’s fiat reserves. There were rumours about crypto exchange Bitfinex going bankrupt, and Tether Ltd. lost its Puerto Rican banking partner Noble Bank. As a result Tether lost its dollar value and dropped towards 85 dollar cents.
Tether was and still is the most used stablecoin on the market. But after this incident it did lose a big part of its market share. With TrueUSD (TUSD), USD Coin (USDC), the Gemini Dollar (GUSD) and Paxos Standard Token (PAX) there are many alternatives for Tether. After the debacle with USDT many exchanges decided to embrace the use of multiple stablecoins in an effort to offer alternatives in case lightning strikes twice.
Originally published at NEDEROB.
