New York’s Attorney General has recently disclosed documents that reveal the once-held reserves of Tether Holdings Ltd., the issuer of the world’s largest stablecoin, USDT. These documents indicate that Tether previously held securities issued by Chinese companies as part of its reserves, providing some insight into the long-speculated and scrutinized nature of Tether’s backing assets.
In October 2021, an investigation by Bloomberg suggested that Tether’s reserves included billions of dollars in short-term loans to Chinese companies and a significant loan to the crypto platform Celsius Network. Tether denied any exposure to the debt of China Evergrande Group but did not comment on holdings of other Chinese securities. According to the recently disclosed documents, Tether held securities issued by well-known state-owned Chinese companies, including Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., and Agricultural Bank of China Ltd. These securities had maturity dates ranging from 2020 to 2021. Tether’s holdings also encompassed securities issued by Deutsche Bank AG, Barclays Bank Plc, and ArcelorMittal SA.
The documents provided details of Tether’s banking relationships, with accounts held at Deltec Bank & Trust, Ansbacher (Bahamas) Limited, Capital Union Bank, and Far Eastern International Bank. Additionally, Tether held reserve assets in funds at Bradbury Investment and Metis Global Partners and had reserves in US dollars, Bitcoin held on Bitfinex (an affiliated crypto exchange), and over $2 billion worth of reserves in gold storage.
While these revelations may answer some questions, they also raise concerns – particularly regarding Tether’s significant lending program, which involved lending USDT to third parties. As of March 31, 2021, the program reached $5.1 billion with collateral in the form of digital assets or securities. With the stablecoin’s critical role in cryptocurrency markets, the quality of assets supporting USDT remains a topic of concern. Traders depend on USDT for liquidity and stability, with its circulation now standing at around $83.5 billion.
CoinGape suggested that the recent depegging of USDT may be the beginning of a more significant development. Nonetheless, the disclosed documents emphasize the importance of thorough market research in the cryptocurrency space. Both the author and the publication do not hold any responsibility for personal financial loss, underscoring the need for investors to conduct their due diligence.
Source: Coingape
