There has been a long debate about Tether's financial security. Tether's U.S. Dollar Peg Is No Longer Credible However, the company behind the world’s largest stablecoin disclosed a report aiming to show “transparency commitment” to clarify whether Tether’s reserves are fully backed or not.
Tether Holdings Limited published its Assurance Opinion issued by an auditing firm, Moore based in the Cayman Islands.
Tether Holdings Limited stated that USDT tokens have “always been fully backed. Per the Moore’s report:
- Consolidated total assets amount to at least $35,276,327,156
- Consolidated total liabilities amount to $35,154,786,806 of which $35,111,966,857 relates to digital tokens issued.
From this report, the group’s consolidated assets exceed its consolidated liabilities. With the report, Tether Holdings Limited issued a comment in regards to the findings:
Tether has always been fully backed, and the assurance opinion we made available today confirms it once again. As Tether’s growth in the market continues to validate our business, we understand the public’s interest in this matter and are pleased to share this attestation as part of our ongoing commitment to transparency.
So has the Assurance Opinion and Tether statements reassured the skeptics? Probably not, there are still some legal issue that make people wonder whats really going on. The New York State Attorney General’s office recently concluded its long-running probe into Tether’s operations and fined the company $18.5 million as part of a settlement agreement.
As part of its investigation into Tether, the New York AG’s office determined that a previous “transparency update” regarding Tether’s reserves was “misleading”—the note included a bank statement, but didn’t disclose that many of the funds had been deposited in the bank that same morning. Before that date, according to the Attorney General’s office, it’s unclear how much money Tether actually had.
The Assurance Opinion is a good gesture, but some critics are citing Tether had $35.3 billion on February 28, supporting the $35 billion in Tether circulating at that time, but what about before this date? The Assurance Opinion only looks at a single moment in time, so we can’t know what what has happened in the past. With the fines from the AG it makes me think there was issues previously, but maybe they are covered. I'd like to see a complete audit that would provide a broader picture of Tether’s holdings and examine activity over a longer period of time.
This is a major issue that the opposition to crypto has been using to preach about the unregulated systems. want to put this FUD to bed and just get on with mass adoption!
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It has really become increasingly important these days to ensure that audits are taking place. Especially as more and more eyes are turned towards the crypto space. I had never considered how crucial it was until just lately.
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Exactly just providing the data proves to people the legitimacy of the project. Would people put their money in a bank that’s not regulator probably not. I do think some of the regulations are bs with traditional financial institutions considering they got us into the financial crisis of 2008.
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Oh yeah, for sure. I know a lot of credit unions that are choosing to stop being federal credit unions because they don't want to be held to all the federal regulations. Especially in states like ours where pot is legal.
That is so good
Tether become as important as bitcoin
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I think stablecoins will replace fiat.
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Not even the dollar has a real backing, the only thing that supports it is that the country that issues it is a power, and the stable currencies that are created from the dollar, it is the same, just smoke and mirrors.
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I can't say that I trust Tether at all. The fact that they still say "Tether has always been fully backed" when the New York AG says the exact opposite tells me something.
That being said, seeing USDT collapse would do absolutely nothing beneficial for anyone. I don't think you'd only see the repercussions of that effect USDT holders alone.
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Hard to say why actually happened but yeah it’s not great about the fine. Bower today they are above water.
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I wish the US dollar was still backed by gold and silver...
Haha me too, but those days are long gone...
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Yep, that’s why we as a country will always be in debt.
I don't trust it, only when there are not other alternatives!
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I’m sticking with usdc myself. I just don’t want it to hurt the markets if there are truly systemic issues.
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So Tether is back by the dollar.
Who backed the dollar ?
I guess tether will find a way
to navigate this pond where only whale
could survive.
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Tether seems like a good stablecoin at the moment. I have used it almost all the time with my trades. It is so good and way above other stablecoins! Tether is fourth in market cap, and the next stablecoin is USD Coin at 13 with a difference of over 30 million USD.
Thank you for an informative article and hope you have a nice day!
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Still not a fan, ill stick with DAI for now
I use usdc or dia myself.
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In theory unaudited fiat backed stablecoins should trade at less than the fiat currency because there is credit risk. However Tether hasn't really traded much below, which points to two possible reasons, there were other ways investors have assessed the credit risk, or they value at a premium the liquidity convenience of tether being a crypto currency. I would expect it's probably the second reason, so should we expect it to trade slightly above fiat if the credit risk is addressed by audit?
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Indeed, I believe they did not have the requirements before and complied before the audit. That would explain the settlement with NY I guess.
Also, is this auditing firm from Cayman Islands 🇰🇾 reliable ?
Thanks for this article
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I think this is a good notice
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This is extremely important news and will further help the whole crypto-economy.
Stablecoins need to be trustworthy, because they enable people to trade/sell coins while not leaving the crypto-space entirely (ie they are not forced to convert to fiat).
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