Cryptocurrency
Crypto-Mystery Clues Suggest Tether Has the Billions It Promised
As reported by Bloomberg Crypto, “As Tether grew into a multibillion-dollar engine of the cryptocurrency market, skeptics kept warning that the digital coin, whose main selling point is that it’s pegged to the dollar, wasn’t actually backed by an enormous pile of cash. Bank statements reviewed by Bloomberg News suggest those fears may be unfounded. […]
As reported by Bloomberg Crypto, “As Tether grew into a multibillion-dollar engine of the cryptocurrency market, skeptics kept warning that the digital coin, whose main selling point is that it’s pegged to the dollar, wasn’t actually backed by an enormous pile of cash. Bank statements reviewed by Bloomberg News suggest those fears may be unfounded.
“Statements spanning four separate months detail the cash held in Tether Ltd.’s accounts, according to documents reviewed by Bloomberg. At least some of the statements have been shared with regulators, people with knowledge of the matter said. The question is whether there really is $1 in the bank for every Tether, and while the documents don’t provide a complete accounting of Tether’s finances, they do offer more detail than has ever been made public.
“For example, one statement shows $2.2 billion was in Tether’s account at Puerto Rico’s Noble Bank Ltd. on Jan. 31. That same day, 2.195 billion Tethers existed, according to data compiled by Coinmarketcap.com. The numbers also match up in September and October 2017. Tether and Bitfinex, a cryptocurrency exchange, are owned by the same executives. The bank statements show money flows between the two after Bitfinex became the only way to buy or sell Tether last year, according to the people familiar with the matter.
“Worries about Tether are pervasive. Searching Google for ‘Is Tether a scam?’ returns thousands of results. News stories have shown the cryptocurrency lacks transparency. The uproar grew when Bloomberg reported in January that the U.S. Commodity Futures Trading Commission issued subpoenas to Tether Ltd. and Bitfinex to check whether there was a cash stockpile.
“The current status of the CFTC investigation into Tether’s bank account couldn’t be determined. CFTC spokeswoman Erica Elliot Richardson declined to comment.”