Reportedly, Tether Holdings Ltd., the issuer of stablecoin USDT, once possessed Chinese company-issued securities as part of its reserves.
Reports have it that the Attorney General of New York had released documents indicating that Tether Holdings Ltd., the issuer of the world’s largest stablecoin, USDT, once held Chinese company-issued securities as part of its reserves. After years of speculation and scrutiny, Tether’s stablecoin’s underlying assets have been revealed.
The Attorney General of New York cast light on Tether’s holdings.
Investigation in October 2021 uncovered evidence that Tether’s reserves included billions of dollars in short-term loans to Chinese corporations and a substantial loan to the cryptocurrency platform Celsius Network.
At the time, Tether denied any exposure to the crisis-stricken China Evergrande Group’s debt but remained reticent regarding its holdings of other Chinese securities.
According to the disclosed documents, Tether held securities issued by notable Chinese state-owned companies, including Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., and Agricultural Bank of China Ltd.
These securities have maturities ranging from 2020 to 2021. Moreover, Tether held securities issued by companies such as Deutsche Bank AG, Barclays Bank Plc, and ArcelorMittal SA.
The documents detailed Tether’s banking relationships, including accounts at Deltec Bank & Trust, Ansbacher (Bahamas) Limited, Capital Union Bank, and Far Eastern International Bank.
Additionally, the stablecoin issuer maintained reserve assets in funds managed by Bradbury Investment and Metis Global Partners. In addition, Tether had reserves in US dollars, Bitcoin held on Bitfinex (an affiliated crypto exchange), and more than $2 billion in gold reserves.
Why is this a Concern?
Additionally, the documents disclosed Tether’s extensive lending program, which involved issuing USDT loans to third parties. As of March 31, 2021, the program had attained $5,1 billion in digital assets or securities as collateral.
Due to USDT’s central role in cryptocurrency markets, the integrity of underlying assets has long been a subject of concern. For liquidity and stability, traders rely on USDT, which has an approximately $83.5 billion circulation.
