Tether, the largest issuer of stablecoins by market capitalization, explained Bloomberg’s story about their reserve holdings.
7 reports, Bloomberg journalist Zeke Faux made numerous claims against Tether, including that the company’s CFO, Giancarlo Devasini, used the company’s reserves to invest in private equity, which appears to contradict it’s public view that equity investments are always fully secured. In addition, Faux claims that Teth has invested in Chinese companies and issued “billions of dollars worth of crypto-backed loans.” According to reports, he was only able to confirm that a bank in the Bahamas is working directly with Tether.
“Tether has not yet announced where they keep their coins,” said Faux. “If Devasini took enough risk to get even a 1% return on Tether’s total reserves, it would bring him and his partners an annual profit of $ 690 million. But when those loans fail, even a small percentage of them will be worth less than $ 1. ”
Teth called the report a “weary attempt” to sabotage the company on the basis of “allegations and misinformation.” The stablecoin issuer challenged the credibility of Faux’s sources to “discredit Giancarlo Devasini and Tether executives” and claimed that their USDT tokens were “fully supported”, citing its quarterly confirmation reports.
In February, Teth and Bitfinex agreed to pay $ 18.5 million in damages to New York State and to file extensive reports on their finances as part of a settlement with the New York Attorney General. York – The most recent exam, with the information reported, was filed on June 30th. Authorities have alleged Tether misrepresented the extent to which its USDT tokens are backed by fiat collateral.
Related: Stablecoins are being scrutinized: USDT stands for “Commercial Paper” -Tether
The Bloomberg report comes as many speculate whether China’s second largest real estate developer, Evergrande Group, will default on $ 300 billion. Faux says Teth denies holding Evergrande debt but would not confirm whether it holds commercial paper from other Chinese companies.