In an apparent attempt to bring an end to USDT’s unrelenting solvency saga, Tether Limited has procured a new banking partner and laid bare its “portfolio” reserves in an account statement dated Oct. 31.
We are pleased to be able to confirm that Tether has an account with Deltec Bank & Trust Limited https://t.co/LSn64soUsC . Balance confirmation at 2018-10-31 attached.
— Tether (@Tether_to) November 1, 2018
According to Tether, Deltec Bank concluded after a months-long “due diligence review” that the company behind the contentious USDT would be a suitable candidate to open a bank account at their Nassau-based financial institution.
The 72-year-old bank would step into Tether’s confusion of dissolved relationships and financial quandaries; arguably first manifesting when the stablecoin operator in January cut ties with audit firm Friedman LLP—who would have been the first to officially verify Tether’s solvency—and crescendoing again in April when banking issues prevented international customers from redeeming USDT for fiat.
Tether, however, assured that it had this time passed Deltec’s assessment with flying colors, and crucially, that the bank was satisfied the company could cough up the dough for USDT-USD redemption “at any moment”. Their announcement, Nov. 1, stated:
This included, notably, an analysis of our compliance processes, policies and procedures; a full background check of the shareholders, ultimate beneficiaries and officers of our company; and assessments of our ability to maintain the USD-peg at any moment and our treasury management policies.
The move comes on the tail-end of what may be Tether’s most turbulent month yet, characterized by immense deliberation over the coin’s welfare after a $500 million USDT ‘burn’ saw the stablecoin shed more than $1 billion of market capitalization and flutter below its supposedly guaranteed $1 peg.
As of the close of business on Tuesday, the new account of the Hong Kong-registered stablecoin issuer apparently held $1,831,322,828 in unspecified assets—a valuation that would exceed USDT’s $1,754,909,000 market capitalization at the time by about $76 million.
Some might seem keen to let the company off the hook just yet, however.
Where the letter may have soothed concerns, it seems to have equally supplied fresh ammunition to Tether skeptics—who promptly met the news with a barrage of pointed tweets, centered around the mercurial description of Tether’s “portfolio” without naming its contents, as well as the credibility of Bahamas-based Deltec itself.
What is in the 'portfolio' and how was it valued? Why assume they have anything approaching the liquidity of cash?? Huge assumption. @CasPiancey can you value my portfolio of used diapers? They are starting to stink. 1.8B$ seem reasonable?
— Matt Crane (@150c_vapour) November 1, 2018
Cover Photo by Boris Baldinger on Unsplash
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