Tether (USDT), the largest stablecoin by market capitalization, has denied the facts of a Bloomberg story about its reserves holdings, calling the report a “tired attempt” to undermine the company.
Bloomberg journalist Zeke Faux said in a Thursday story that Tether’s chief financial officer Giancarlo Devasini has utilized the company’s reserves to make investments, contradicting Tether’s public assertion that the holdings were fully supported at all times.
Faux also claims that Tether has invested in Chinese companies and issued “billions of dollars” in crypto-backed loans. He was only able to confirm that one bank in the Bahamas was working directly with Tether, according to the report.
“Tether has yet to reveal where it keeps its money,” Faux remarked. “If Devasini is willing to take enough risk to make even a 1% return on Tether’s entire reserves, he and his partners would reap $690 million each year.” However, if even a small number of those loans fail, one Tether will be worth less than $1.”
The article, according to Tether, is a “tired attempt” to discredit the firm using “innuendo and disinformation.” The stablecoin issuer questioned Faux’s sources in an attempt to “discredit Giancarlo Devasini and Tether’s executives,” and insisted that its USDT coins are “completely supported,” citing quarterly assurance reports.
As part of a deal with the New York Attorney General’s Office in February, Tether and Bitfinex agreed to pay $18.5 million in penalties and produce thorough financial reports the most current audit was filed with information disclosed as of June 30. Authorities stated that Tether lied about the amount of currency collateral backing its USDT coins.
Many are speculating whether China’s second-largest property developer, Evergrande Group, may default on $300 billion in obligations, according to the Bloomberg report. Tether denied having any debt from Evergrande, according to Faux, but would not disclose if it owned commercial paper from other Chinese companies.
