A Location of Tether’s Mysterious Reserve Has been Revealed

The USDT issuer, Tether, holds an undisclosed percentage of its assets in a Bahamian boutique bank. With more and more attention paid to the cash and other instrument reserves of the USDT issuer Tether, people familiar with the matter disclosed to the financial times that an undisclosed percentage of the reserves of Tether was deposited in capital union, a boutique bank in the Bahamas.

CTO Says Liquidity is Not an Issue

Tether, a private company, has issued stablecoin linked to legal currency in the United States, Mexico, Europe and China, but has so far refused to disclose its partners within the scope of its rights. “Our counterparties are not public. We are not a listed company,” an executive told the financial times. USDT was established in 2014, providing a convenient way for cryptocurrency traders and investors to purchase other cryptocurrencies without leaving the digital asset ecosystem. A USDT can be exchanged for a dollar.

After Tether recently plummeted to $0.95, this is considered a de pegging event in the stablecoin market, and holders are eager to convert their USDT into legal currency. Tether has completed the redemption worth US $10billion. According to Paolo ardoino, chief technology officer, this proves that the company has enough liquidity to support its stablecoin.

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Exposure of Tether’s Partners

So far, Tether has declined to comment on its report contact with capital union bank. The bank official said, “the only information we disclose about our company is included in the annual report”. Capital union was established nine years ago, and by 2020, it has held us $1billion in assets. However, Tether has indeed confirmed the connection with another Bahamian bank deltec bank & trust since 2018. The bank leader confirmed to Bloomberg in 2021 that the bank only holds 25% of Tether’s reserves as cash and bonds.

In early may2022, ardooin said in a statement to the financial times that the company held cash deposits in two Bahamian institutions and had “strong banking relationships” with many banks around the world.Last year, capital union hired a digital asset manager. In April this year, it began to use the compliance software written by the analysis company chainalysis.

Tether was fined $41million by the commodity and Futures Trading Commission last year for falsely holding cash reserves in banks to maintain its stablecoin peg. The company reached a settlement with CFTC and did not confirm or deny these allegations.