Reading 3 min Views 4 Published Updated
Stablecoin operator Tether Holdings moved more than $4.5 billion out of banks in the first quarter of 2023, resulting in a “substantial reduction” in counterparty risk, the company said in a post promoting its latest BDO Italia certification.
Tether’s market capitalization rose from $66 billion to over $82 billion in the first quarter, while Tether lost over 90% of its bank deposits, reducing it from $5.3 billion to $481 million. Tether said that the remaining bank deposits were distributed among several banks, citing its competitors who suffered losses after recent bank failures.
Simultaneously, Tether increased its US Treasury bills to a new high of over $53 billion, or 64% of its reserves. Combined with other assets, the Tether USDT token is now 85% backed by cash, cash equivalents and short-term deposits “that can be quickly sold to process redemptions.” This includes over $7.5 billion in repos. Besides:
“Decade-high rates of return boost returns by adding to Tethers excess reserves, effectively providing USDT excess collateral.”
Tether disclosed its holdings of gold and Bitcoin (BTC) for the first time during an attestation this quarter, demonstrating its commitment to transparency. He highlighted his financial performance for the quarter compared to other companies, naming Blackrock, Netflix, Starbucks, Cash App and PayPal as top earners.
Tether has been looking to improve its financial performance for months and has gone to great lengths to highlight its progress. In June, he announced that he would reduce the amount of commercial paper in his reserves from $20 billion to $8.4 billion by the end of that month and to zero by the end of the year. He successfully achieved this goal.
In a Tweet a few days ago, I criticized Tether. Mr. Paolo Ardoino, CTO of Tether, responded with 18 points and a slew of other tweets. This is my fourth and final response. It’s been a terrific and civil exchange of ideas.
My original Tweet:… pic.twitter.com/X1tCNHNTeE
— John Reed Stark (@JohnReedStark) May 13, 2023
Tether, owned by Hong Kong-based iFinex, is struggling with negative suspicions and accusations about its finances. It was rumored that Tether had large investments in Chinese commercial paper when the huge China Evergrande Group suffered a financial crisis.
In 2021, the New York Attorney General’s Office fined Tether $18.5 million for misrepresenting the fiat backing of its reserves. The settlement also required greater financial transparency from the stablecoin issuer.
Related: Circle CEO Blames US for Decline in US Cryptocurrency Market Cap
This month, John Reed Stark, former head of Internet compliance at the U.S. Securities and Exchange Commission, called Tether a “giant house of cards” in an extensive “terrific and polite exchange of ideas” with Tether CTO Paolo Arduino on Twitter.
Stark noted that Tether promised to conduct a full audit within “months, not years” in 2021, which has yet to happen. A performance appraisal like the one published this quarter is usually more narrowly focused and doesn’t provide an outsider’s view of a company’s financial health.