Tether’s Desire to Keep its Banking Relationships and Reserves Secret Cost $18.5 Million

Initially Tether opened its account in Taiwan, after a cut-off with this corresponding account Tether moved further to Montreal and Puerto Rico. As it believes to maintain a strong relationship with the banking sector it is currently maintaining relationships with more than seven to eight banks across the world. 

Further, the Financial Times has noted about some of Tether’s $73 billion reserves are being stored at a relatively obscure Bahamas bank called Capital Union. Relatively only a small portion of Tether’s reserves could be stored in the bank, as the bank’s overall asset count itself is just $1 billion. 

Tether processes redemptions upon request, and maintains “Strong banking relationships with more than seven, eight banks across the world.” Whereas it has paid $18.5 million to the New York Attorney General in the form of settlement just to maintain its banking secret and relationship with the bank.

Tether further believes that it would have paid more than $18.5 million, if it had disclosed its relationships and the nature of its holdings backing its dollar peg, the resulting market chaos would cost it even more it believes. 

As Terra’s UST started facing difficulties, Tether had the fight to maintain its peg with the dollar with a 1:1 ratio. Here the question arises is, how long the Tether’s peg would be maintained through this coming bear market.

Noting these market conditions the FxPro Senior Market Analyst Alex had written

“The emerging rebound from the bottom may be self-sustaining at first, as many market participants believe that the crypto market has corrected enough to become attractive for long-term buying, However fundamental such as halving, soft monetary policy or accelerated adoption are needed for growth to continue.”