Issued by Chinese government ICBC, China Construction Bank and Agricultural Bank of China bonds acted as collateral for Tether (USDT) in March 2021. This follows from the presented NYAG documents, writes Bloomberg.
They list individual instruments, but do not indicate at what point the company owned them. The securities mature in 2020 and 2021.
According to the documents, Tether also owned bonds issued by Deutsche Bank, Barclays Bank, ArcelorMittal and other companies.
During the specified period, the issuer provided loans for $5.1 billion to at least 30 organizations secured by bitcoin, Ethereum and securities. The company used several Bahamian bank accounts and Bitfinex to hold the first cryptocurrency in reserves.
The agency recalled its investigation in October 2021. Then the journalists found out that the reserves of the stablecoin include short-term loans to large Chinese organizations and loans to landing platforms like Celsius Network.
Bloomberg interlocutors then called Tether “an offshore hedge fund with a high level of risk.” They also pointed to a Ponzi-scheme-like Bernie Madoff damage in the event of the collapse of the “stablecoin”.
The issuer denied speculation that crisis-hit real estate developer Evergrande Group held securities in its reserves, but declined to report other Chinese companies’ instruments in collateral.
As a result of the litigation, Tether and the Bitfinex exchange agreed to pay $18.5 million to NYAG. Under the terms of the settlement, the issuer was required to provide the prosecutor with a quarterly statement of reserves within two years.
The agency received access to documents on the status of Tether reserves as of March 31, 2021 with a detailed description AML-procedures.
This became possible after NYAG passed this information to CoinDesk. The issuer requested trade secret protection and a ban on disclosure of USDT reserves after the official accession editions to the process.
“Tether is in a completely different position compared to two years ago. The company has demonstrated that its reserves are extremely liquid, of high quality and available to support buybacks of any size. materials […] in the media they give a limited representation, which was relevant more than two years ago”, — assured issuer.
In June 2022, the organization denied rumors that 85% of the reserves were backed by Chinese commercial paper. Tether also emphasized that the liquidation of Celsius positions did not bring losses.
In July, the issuer promised to nullify the share of such instruments in reserves, which at that time were estimated at $3.7 billion. This happened four months later.
In August, WSJ journalists published two articles questioning the company’s financial viability.
Earlier, the capitalization of Tether set a new record at around $83.4 billion.
As a reminder, in May 2023 CTO Paolo Ardoino stated that the firm is considering new lines of business due to high profitability. Tether has pledged to allocate up to 15% of profits to the purchase of the first cryptocurrency.
According to a report for the first quarter of 2023, the issuer owned $1.5 billion worth of bitcoin – about 1.8% of total reserves. During the same period, Tether recorded a net profit of $1.48 billion.
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Cryplogger Newsletters: Keep your finger on the pulse of the bitcoin industry!
Issued by Chinese government ICBC, China Construction Bank and Agricultural Bank of China bonds acted as collateral for Tether (USDT) in March 2021. This follows from the presented NYAG documents, writes Bloomberg.
They list individual instruments, but do not indicate at what point the company owned them. The securities mature in 2020 and 2021.
According to the documents, Tether also owned bonds issued by Deutsche Bank, Barclays Bank, ArcelorMittal and other companies.
During the specified period, the issuer provided loans for $5.1 billion to at least 30 organizations secured by bitcoin, Ethereum and securities. The company used several Bahamian bank accounts and Bitfinex to hold the first cryptocurrency in reserves.
The agency recalled its investigation in October 2021. Then the journalists found out that the reserves of the stablecoin include short-term loans to large Chinese organizations and loans to landing platforms like Celsius Network.
Bloomberg interlocutors then called Tether “an offshore hedge fund with a high level of risk.” They also pointed to a Ponzi-scheme-like Bernie Madoff damage in the event of the collapse of the “stablecoin”.
The issuer denied speculation that crisis-hit real estate developer Evergrande Group held securities in its reserves, but declined to report other Chinese companies’ instruments in collateral.
As a result of the litigation, Tether and the Bitfinex exchange agreed to pay $18.5 million to NYAG. Under the terms of the settlement, the issuer was required to provide the prosecutor with a quarterly statement of reserves within two years.
The agency received access to documents on the status of Tether reserves as of March 31, 2021 with a detailed description AML-procedures.
This became possible after NYAG passed this information to CoinDesk. The issuer requested trade secret protection and a ban on disclosure of USDT reserves after the official accession editions to the process.
“Tether is in a completely different position compared to two years ago. The company has demonstrated that its reserves are extremely liquid, of high quality and available to support buybacks of any size. materials […] in the media they give a limited representation, which was relevant more than two years ago”, — assured issuer.
In June 2022, the organization denied rumors that 85% of the reserves were backed by Chinese commercial paper. Tether also emphasized that the liquidation of Celsius positions did not bring losses.
In July, the issuer promised to nullify the share of such instruments in reserves, which at that time were estimated at $3.7 billion. This happened four months later.
In August, WSJ journalists published two articles questioning the company’s financial viability.
Earlier, the capitalization of Tether set a new record at around $83.4 billion.
As a reminder, in May 2023 CTO Paolo Ardoino stated that the firm is considering new lines of business due to high profitability. Tether has pledged to allocate up to 15% of profits to the purchase of the first cryptocurrency.
According to a report for the first quarter of 2023, the issuer owned $1.5 billion worth of bitcoin – about 1.8% of total reserves. During the same period, Tether recorded a net profit of $1.48 billion.
Found a mistake in the text? Select it and press CTRL+ENTER
Cryplogger Newsletters: Keep your finger on the pulse of the bitcoin industry!