In 2021, the company was required to regularly publish financial statements

​Tether has met its reserve disclosure obligations

16.06.2023 - 10:15

370

2 min

What’s new? Tether, the issuer of the USDT stablecoin, reported full compliance with its reporting obligations to the New York Attorney General’s Office under the terms of its 2021 settlement. The settlement called for Tether to file quarterly reserve reports for two years. This is reported on the company’s website.

News on the Tether website

Tether is the largest issuer of stablecoins in the crypto market. Centralized USDT, which is pegged to the US dollar, as of June 16, ranks third in the overall cryptocurrency ranking with a capitalization of $83,48 billion.

What else is known? Shortly after the 2021 settlement, CoinDesk, in accordance with New York’s Freedom of Information Law, demanded public disclosure of materials related to the first of Tether’s quarterly reports.

Tether emphasized that the parties have not had any comments about the completeness of the information or the composition of the reserves at any time during the reporting period. The published documents include publicly disclosed reserves verified by independent third-party audits. In addition, they confirm the company’s use of best-in-class asset management concepts, including short-term investments and diversification.

Tether called suspicious the fact that the attack on USDT, both through DeFi and centralized exchanges, took place on the very day of the transfer of materials to CoinDesk. This was a situation in which the asset temporarily lost its peg to the dollar on the Curve platform. The company continues to monitor the USDT markets and look for further signs of manipulation to spread panic.

About the company’s policy changes. Tether reduced its bank deposits by 90% in Q1 2023. The amount deposited with financial institutions was reduced from $5,3 billion to $0,481 billion, significantly reducing counterparty risk, the company noted. The remaining deposits were distributed among several banks.

At the same time as the deposits were reduced, the company built up the share of US Treasury bills to a new high of $53 billion, or 64% of its reserves. Combined with other assets, USDT is now 85% backed by cash, cash equivalents, and short-term deposits, which can be sold quickly for repayment.

In addition, since May, Tether began regularly allocating up to 15% of its realized net operating profits to BTC purchases. The firm’s officials expect that current and future bitcoin holdings will not exceed its shareholder capital cushion and will further strengthen and diversify its reserves.

The company held $1,5 billion in BTC at the end of March, according to its Q1 2023 report. In addition, Tether will not turn to custodians and will keep its own private keys to bitcoin wallets.

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