Tether, the issuer of USDT, holds a secret percentage of its assets in a boutique Bahamian bank. It is also interesting to note that Tether’s reserves of cash, including other instruments, are now facing stricter scrutiny.
Meanwhile, a source reported that the undisclosed percentage of Tether’s reserves are held in a boutique bank in the Bahamas, Capital Union.
Founded in 2014, USDT provides cryptocurrency traders and investors a convenient way to buy other cryptocurrencies without leaving the digital asset ecosystem. One USDT can be redeemed for one U.S. dollar.
A private company, Tether has issued stablecoins tied to fiat currency in the USA, Europe, China, and Mexico. The firm has refused to reveal its partners. A senior executive stated that their company and counterparties are not public.
USDT offers cryptocurrency investors and traders a convenient way to purchase other digital assets without having to leave the crypto ecosystem.
After the recent plunge of Tether, a de-pegging even in the stablecoin market, Holders hurried to convert their USDT to fiat currency. Tether successfully completed redemptions worth $10B.
Who Are The Partners Of Tether?
No official comments from Tether have come on its reported links with Capital Union bank. However, the bank officials gave the statement that their annual report contains all the information that they wanted to make public.
Nine years ago, Capital Union was established and, as of 2020, holds $1B in assets. However, since 2018 Terra has verified that it is linked to Deltec Bank & Trust, another Bahamian bank. The bank’s leader also confirmed the information to Bloomberg in 20221 that around 25% of Tether’s reserves are held by the bank in the form of cash and bonds.
As of early May, Ardoino made a statement saying that the firm has “strong banking relationships” with several banks around the world and held cash deposits in two Bahamian institutions.
Capital Union hired a digital asset manager last year and from April this year has started using compliance software written by analytics firm Chainalysis.
The Commodities and Futures Trading Commission levied a fine of $41M on Tether last year, alleging that it held cash reserves in banks for maintaining the peg of its stablecoin. The firm made a settlement with the CFTC without confirming or denying the allegations.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2022/05/31/some-of-tethers-undisclosed-reserves-are-held-here/