Bitrabo Editorial
Tether, one of the leading providers of stablecoins, has responded to growing concerns about the inclusion of Chinese securities in the reserves of USDT. The company has issued a comprehensive rebuttal to address these concerns, in response to reports by mainstream media outlets, including Bloomberg.
The reports cited documents released by New York’s Attorney General (NYAG), which brought attention to the previous backing of USDT by securities from prominent Chinese state-owned firms. Tether’s detailed response aims to provide a deeper understanding of the company’s practices and the rationale behind its reserve composition.
Tether Clears Up Misconceptions Regarding Recent Reports
In response to the reports on Chinese securities in its reserves, Tether’s chief technology officer, Paolo Ardoino, took to Twitter to assert that the documents released by NYAG disproved various claims made against the company. Ardoino specifically addressed the accusation of lacking a bank account, stating that the documents provided evidence to the contrary.
Regarding the Chinese securities, Ardoino defended the company against those who accused it of holding onto debt from the troubled Chinese property developer Evergrande. He characterized these accusers as “a few clowns” and argued that the documents vindicated Tether in this regard. Tether’s official Twitter account also expressed its opinion on the media coverage, suggesting that outlets like Bloomberg and CoinDesk may have rushed to present the information without considering current events or verifying facts thoroughly.
The company stated that it does not endorse such behavior and emphasized that its primary focus is on serving its customers. Furthermore, Tether clarified that the materials obtained by the media outlets do not accurately represent the company’s current state.
The stablecoin issuer noted that the data provided to the media platforms is limited and more than two years old, indicating that it does not reflect Tether’s present composition or practices.
Where the Accusations Come From
The accusations surrounding Tether and its involvement with Chinese securities stem from an investigation conducted by Letitia James, the Attorney General of New York, which started in April 2019. At that time, James’s office was investigating whether the cryptocurrency exchange BitFinex had concealed substantial losses from its investors.
Approximately $700 million of these alleged losses were reportedly linked to Tether reserves, which James referred to as BitFinex’s “slush fund.” The case reached a settlement in February 2021, leading to significant consequences for both BitFinex and Tether. They were subsequently prohibited from conducting business activities in the state of New York as part of the settlement terms.
Featured image from Financial Times