Tether to reduce the share of commercial debt in its reserves
The decision came amid the company’s accusations of a lack of transparency in the provision of USDT
14.04.2022 - 10:20
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What’s new? Tether Limited, the issuer of the USDT stablecoin, plans to reduce the volume of commercial debt obligations in the USDT reserve. This move is aimed at increasing the transparency of the company’s operation and the trust of investors and users of the world’s most popular stablecoin, CNBC reports.
What is known about the accusations against Tether? After acquiring short-term corporate debt obligations as a reserve for USDT, the company refrained from disclosing which securities were purchased. This raised a number of questions and suspicions on the part of the community regarding the asset’s collateral.
In response, Tether decided to reduce the amount of commercial paper in its reserves. From the third to the fourth quarter of 2021, their share dropped from 44% to 30%. Tether chief technology officer Paolo Ardoino said that this process will continue in 2022.
What had happened before? In December 2021, a class-action lawsuit was filed against Tether for the second time in a year. The lawsuit states that Tether Holdings falsely assured that USDT is fully backed by the US dollar. And in October, the US Commodity Futures Trading Commission (CFTC) settled claims against Tether and the Bitfinex crypto exchange. It ordered them to pay fines totaling $42,5 million for statements misleading investors and illegal transactions with US citizens.
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