For several months, Tether has been the subject of mass speculation. Ever since a report emerged last summer alleging that the stable coin was responsible for bitcoin’s meteoric rise in 2017, everyone – including various government agencies – have looked at it to see if its dealings and operations are legal and appropriate.
In the past, executives of Tether have alleged that they hold roughly $1 million USD in the bank for every unit of tether. This would amount to a lot of money stashed away, but according to new data uncovered by Bloomberg, the statements made regarding Tether’s operations as of late appear to be based in truth.
The Claims Behind Tether and Bitcoin
For example, a recent bank statement shows approximately $2.2 billion in Tether’s account at Puerto Rico’s Noble Bank Ltd. last January. At the time, approximately 2.195 billion tethers existed per CoinMarketCap.com. Figures also add up for both September and October of last year.
Naturally, some data is still left open. For instance, it is still unclear where the funds originated from and where they’re presently stored. The bank statements garnered by Bloomberg were provided by a representative of the company that has access to Tether’s financial records, though a government official has confirmed the statements’ validity.
At the same time, Tether has witnessed several of its banking partnerships dissolve in the past year. In 2017, executives were forced to find alternatives after Wells Fargo cut its ties with the company. The organization’s relationships with several Taiwanese financial leaders also came to an end.
Stuart Hoegner – the general counsel for Tether – recently commented:
“As a company that takes its legal and compliance obligations very seriously, we are not in a position to comment on the discussions we have nor to acknowledge the existence of subpoenas or similar legal requests.”
Since November 2018, a criminal probe involving Tether’s alleged ties to bitcoin has been the primary focus of the Commodity Futures Trading Commission (CFTC). The mentioned report released last summer – written by University of Texas finance professor John Griffin – claims that every time bitcoin’s price dropped in 2017, tether was used to purchase the asset and potentially tie it to USD, boosting its value.
A Case That’s Up in the Air
Tether CEO JL van der Velde has repeatedly denied these claims, saying that Tether issuances “cannot be used to prop up the price of bitcoin or any other coin/token.”
The U.S. Justice Department issued a subpoena to Tether late last year. While neither the Justice Department nor the CFTC has accused Tether of any wrongdoing, the case presently remains ongoing.
Do you believe Tether is innocent? Post your comments below.
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