Tether stated that the cryptocurrency is powered by reserves valuing over $35B. However, it has not specified what exactly the nature of the investments is.
The issuer of stablecoin attested to this claim about the backing behind each coin on 30th March. Such a statement is the first of its kind from the company but doubters remain unconvinced by it.
The Attestation By Tether
The document consists of a report by Tether as well as a statement originating from a tiny accounting firm named Moore Cayman. The firm is located in the Cayman Islands. The report reads that as of 28th February, the company has about $35.3B worth of assets and $35.2 worth of liabilities. Furthermore, $35.1B worth of said liabilities were claimed to be related to issued digital tokens. That means the amount is being used to back the Tethers that were, at that point, in circulation.
The gesture is an attempt at transparency as Tether has been subject to intense scrutiny as a result of its evasiveness in its history. The office of the NY State Attorney General recently wrapped up its extensive probe into the operations of the company and had fined Tether $18.5M to agree to settle.
Questions however remain pertinent as the latest document does not resolve much. A major one is regarding the claimed backing value before 28th February. The document gives no answers to that.
In the course of the investigation, the NY AG office had revealed that one such “transparency update” in the past was “misleading”. The previous note consisted of a statement from the bank that did not reveal how much funds were deposited on the same morning. The AG office says that the amount of money in the company’s possession before the date remains unclear.
An audit, a complete one, is the only way to get a more comprehensive picture of what exactly is going on at Tether.