Tether recently announced a net profit of $1.48 billion, expressing optimism for the future as its reserves reached an all-time high of $2.44 billion, a significant increase from the same quarter last year. According to a company blog post, most of Tether’s reserves were held in cash and cash equivalents, with the majority invested in U.S. Treasury Bills – only a meager 1.8% held in Bitcoin. It’s noteworthy that the Q1 2023 assurance report, prepared by accounting firm BDO Italia, has not been independently audited.
As the company responsible for minting USDT, the third-largest cryptocurrency after Bitcoin and Ethereum and the biggest stablecoin, Tether plays an important role in the crypto markets. Stablecoins, backed by “stable” assets like the U.S. dollar, have a significant presence in the market, with USDT having a market cap of $82.5 billion and a 24-hour trading volume of $16.5 billion.
Traders find value in using USDT for quick entry and exit trades without relying on a traditional bank or fiat currency. This is especially relevant in markets where dollars are restricted or unavailable, and in the decentralized finance (DeFi) sector that seeks to bypass traditional banking systems.
However, Tether has faced scrutiny over its transparency in backing USDT with U.S. dollars. In March, the Wall Street Journal dived into emails revealing that some companies supporting USDT had used fake documents and shell companies to help Tether’s parent company gain access to the banking system, a claim that Tether staunchly denies calling the report misleading and inaccurate.
Moreover, in 2021, Tether agreed not to conduct business in New York following a two-year investigation by the New York Attorney General. The investigation concluded that Tether had made false statements about the backing of its stablecoin.
Despite the controversies surrounding Tether, its Q1 2023 results remain impressive, and the company’s Chief Technology Officer, Paolo Ardoino is thrilled with the success, as seen in his tweet announcing the record-breaking $2.44 billion surplus over reserves. It remains to be seen if Tether’s optimism will hold, and if increased transparency is ahead for the stablecoin leader amidst ongoing scrutiny.
Source: Decrypt
