Tether’s USDT Token Supply Fully Backed by Fiat According to Bank Statements, Shows Bloomberg Report
According to the latest report from Bloomberg, the controversial cryptocurrency startup Tether has got its USDT token in circulation, completely backed by fiat reserves. The report goes to mention that Bloomberg has scanned the company’s “bank statements” for four different months that reveals the amount of cash held in Tether Ltd.’s accounts. Bloomberg has also said to have shared some of the bank statements with the regulatory bodies.
The Bloomberg report notes: “one statement shows $2.2 billion was in Tether’s account at Puerto Rico’s Noble Bank Ltd. on Jan. 31. That same day, 2.195 billion Tethers existed, according to data compiled by Coinmarketcap.com. The numbers also match up in September and October 2017”.
Furthermore the report goes to mention that for the period between September 2017 to July 2018, the combined fiat bank balance for Tether was equal to or even higher than the circulating USDT tokens.
The report also mentions that “To be sure, the bank statements reviewed by Bloomberg don’t show, for example, where the funds originated or where they are now. The statements were provided by someone with access to the company’s records, and a government official confirmed their veracity.”
Tether is popular for its dollar-pegged USDT stablecoin which the company launched last year in 2017. However, over the last year, several reports point to Tether’s controversial issuance of the USDT tokens without actually backing with real fiat.
Another thing is Tether and crypto exchange Bitfinex are controlled by the same executives. “The bank statements show money flows between the two after Bitfinex became the only way to buy or sell Tether last year, according to the people familiar with the matter,” the report notes.
Tether has been accused of sourcing USDT tokens to Bitfinex last year inflating the price of Bitcoin during the 2017 bull run. Soon as this controversy caught fire, the two companies were even issued subpoenas by the U.S. CFTC.
Other regulatory departments like the U.S. Department of Justice (DOJ) was also probing Tether for its role in crypto market manipulation last year.
Furthermore, the lack of clear audit by Tether has raised more speculation in its actual nature of functioning, although Tether has always claimed to be clean on its part.
While commenting on Tether’s CFTC inquiry, Stuart Hoegner, the general counsel for Tether and Bitfinex, said: “As a company that takes its legal and compliance obligations very seriously, we are not in a position to comment on the discussions we have nor to acknowledge the existence of subpoenas or similar legal requests.”