Tether, the largest stablecoin issuer by USDT market capitalization, has rejected Bloomberg’s allegations about its reserves.
In a report on Thursday, Bloomberg journalist Zeke Faux made numerous claims against Tether, including that its chief financial officer Giancarlo Devasini used the company’s reserves for investments. This seems to contradict Tether’s public view that stocks are fully hedged at all times. In addition, Faux claims that Tether has invested in Chinese companies and issued “billions of dollars worth of crypto-backed loans.” However, he could only confirm that a bank in the Bahamas was working directly with Tether.
“Tether has not yet disclosed where his funds are being held. If Devasini took enough risk to earn even 1% of the total Tether reserve block, he and his partners could make a huge annual profit of $ 690 million. But if these loans fail, even a small percentage of them will drop a USDT below $ 1. “
Tether called the report a “boring attempt” to sabotage the company’s business on the basis of “innuendo and misinformation.” The stablecoin issuer claims the sources Faux is using to “discredit the executives of Giancarlo Devasini and Tether” are unreliable, claiming that each of its USDTs is “100% covered”.
In February, Tether and Bitfinex agreed to pay the New York attorney general a $ 18.5 million fine and submit extensive financial reports as part of the settlement – the final review was on June 30th. Authorities have alleged Tether misrepresented the extent to which USDT is backed by fiat collateral.
The Bloomberg report comes amid concerns that Chinese real estate giant Evergrande Group has defaulted. Faux says Tether denies holding Evergrande debt but would not confirm whether it holds commercial paper from other Chinese companies.
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According to Cointelegraph