Tether Slams Bloomberg’s Investigative Report as Pre-Packaged with A Pre-Determined Narrative

Tether Slams Bloomberg’s Investigative Report as Pre-Packaged with A Pre-Determined Narrative

Bloomberg says Tether has invested billions of dollars of its reserves in Chinese commercial paper and loaned $1 billion to crypto lender Celsius Network with Bitcoin as collateral.

“Crypto Mystery: Where’s the $69 Billion Backing the Stablecoin Tether?” is Bloomberg’s latest investigative report covering the stablecoin despite Tether sharing the breakdown of its reserves and NYAG settling the 22-month inquiry into the stablecoin issuer and the exchange Bitfinex.

Tether slammed Bloomberg’s report saying all it had was old news and dubious sources, making it a “pre-packaged and pre-determined narrative.”

“Crypto—and Tether in particular—are fostering a revolution in financial inclusion, transforming a model that doesn’t work in a modern world,” said the issuer on Thursday in a statement.

“It’s another tired attempt to undermine a market leader whose track record of innovation, liquidity, and success speaks for itself.”

The takeaways of Bloomberg’s story include billions of dollars of Tether’s reserves being invested in Chinese commercial paper. Recently, Tether denied that it holds any Evergrande debt and has said that the vast majority of commercial papers have high grades from credit-rating firms.

According to the report, Tether has loaned $1 billion to crypto lender Celsius Network with Bitcoin as collateral, on which the latter pays an interest rate of 5%-6%. Tether was actually the lead investor in Celsius network’s $30 million funding round last year.

“It’s not a stablecoin, it’s a high-risk offshore hedge fund,” Bloomberg quoted John Betts, former CEO of Noble Bank International LLC in Puerto Rico, which Tether used. In response to this, Tether said they fired Betts as its banker, and he has been “accused of engaging in egregious and wasteful self-dealing and seeking to enrich himself at Noble’s expense” in an ongoing lawsuit.

The investigation further reports the US Department of Justice looking into Tether executives regarding criminal bank fraud investigation and that the FBI is examining whether they deceived banks years ago to open accounts.

Regulatory scrutiny of the cryptocurrency market, however, is nothing new. As the sector gains mainstream adoption, authorities around the world are struggling to regulate the nascent asset class while making sure innovation is not stifled.

“(Tether) is a resource for the unbanked, a tool for an evolving payment system, and a leader in driving the mainstream adoption of a new financial revolution. Tether is the most liquid stablecoin on the market, it was the first stablecoin, and it has withstood years of volatility.”

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Author: AnTy

China’s Lehman Moment? Crypto Market Takes Note of Real Estate Giant Evergrande’s Debt Crisis

While the crypto market is contemplating the effect of Evergrande’s possible fallout, Tether has clarified that it is “doesn’t hold and never held,” commercial paper issued by Evergrande.

Real-estate giant Evergrande is looking more and more like the Lehman Brothers moment of China as investors brace for its collapse. According to experts, the Chinese Communist Party (CCP) will have to save the company, whose collapse would send shockwaves across the global economy.

Capital Economics estimated that the company has around 1.3 trillion yuan ($200 billion) in pre-sale liabilities as of the end of June.

Lehman Brothers collapsed in September 2008, dissolving $600 bln in US assets leading to the worst market crash since the great depression.

This week, anxious investors protested at the Shenzhen headquarters of the company as Evergrande said it is facing “unprecedented difficulties” but denied rumors that it is about to go under.

But on Tuesday, in a statement to the Hong Kong stock exchange, Evergrande said it had hired financial advisers to explore “all feasible solutions” and warned that there was no guarantee it would meet its financial obligations.

Evergrande blamed “ongoing negative media reports” for damaging sales in the pivotal September period.

“Evergrande’s collapse would be the biggest test that China’s financial system has faced in years,” said Mark Williams, chief Asia economist at Capital economics.

This, of course, poses a serious problem for CCP as Evergrande is a longstanding symbol of the country’s economically productive urbanization, and its business model is representative of “China’s highly debt-dependent growth model,” said Jean-François Dufour, head of French, China-focused consulting firm DCA Chine-Analyse.

Founded in 1996, the company pursued a very aggressive growth strategy and raised $9 billion in its IPO on the Hong Kong Stock Exchange in 2009. It now controls 778 real estate projects in 223 Chinese cities and directly employs nearly 200,000 people while claiming to have indirectly created more than three million jobs.

Reportedly, the company had only $13 billion to its name as of late June, while it is due to pay $15 billion to creditors by the end of 2021.

At the same time, banks are reluctant to lend them money, on top of which, “It’s become more complicated because of the restrictive monetary policy the government is currently pursuing,” Frédéric Rollin, an investment strategy adviser at Pictet Asset Management, told French 24.

According to Rollin, in 2020, compared to the US companys’ debt representing 85% of the gross domestic product (GDP) and 115% in the eurozone, Chinese companies’ debt represented 160% of its GDP.

With Evergrande bound to take at least one bank down with it if it goes bankrupt, China needs to prevent Evergrande from going under. And these shockwaves are to be expected to be felt beyond China because it counts big international companies like BlackRock, Allianz, and Ashmore among its investors.

This week, even the crypto community took notice of this, with Adam Cochran of Cinneamhain Ventures arguing on Twitter that “Currently both Tether and Circle hold commercial paper, and while I think it unlikely that either would have large swaths of Evergrande bonds, the whole market will reel a bit.”

Tether meanwhile clarified that it doesn’t hold any commercial paper issued by Evergrande; rather, its vast majority of the commercial paper is in A-2 and above rated issuers.

“Doesn’t hold and never held,” tweeted Paolo Ardoino, CTO of Tether and Bitfinex.

Meanwhile, Cochran is expecting the shockwaves to be felt in crypto as well because “while we can hope that crypto one day becomes a flight from the tradfi markets, right now its sufficiently intertwined to its movements.”

“This is a very big deal indeed,” said Matthew Graham, CEO of crypto VC firm Sino Global Capital, adding, but “for real estate and tradfi.”

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Author: AnTy

Tether Wants Court to Deny CoinDesk’s FOIL Request on the Breakdown What is Backing USDT

Tether Wants Court to Deny CoinDesk’s FOIL Request on the Breakdown What is Backing USDT

World’s largest stablecoin operator Tether Limited has petitioned the courts not to accede to CoinDesk’s request in a filing.

Tether Slams The Door On CoinDesk

Earlier this week, the popular stablecoin company asked a New York judge to block disclosure efforts from the industry news outlet.

According to official documents, Tether Limited – as well as its sister company; crypto exchange Bitfinex – filed to block the New York Attorney General (NYAG) from disclosing information about USDT’s reserve breakdown to crypto-focused news agency CoinDesk.

The reports confirmed that CoinDesk had filed a Freedom of Information Law (FOIL) request with the NYAG, asking for information about USDT’s asset reserves. Tether Limited and Bitfinex had submitted the documents to the NYAG earlier this year in a settlement of a two-year case over whether the two companies had commingled funds to cover up fraud.

As CoinDesk reported, Tether’s lawyers had initially asked the FOIL officer at the NYAG’s office to deny the request. After the FOIL officer obliged, CoinDesk appealed the decision. The appeal was successful, with the appeals officer eventually gaining access to the documents. Now, Tether is going on the offensive once more, requesting that a judge blocks access to the documents.

Tether is arguing that disclosure of USDT’s banking reserves will affect the asset’s competitive edge as the most popular stablecoin.

“Bitfinex and Tether differentiate themselves from their competitors using at least three secret and competitively sensitive types of data that are at issue in this proceeding: (1) financial strategies, (2) compliance measures and documentation and (3) customer data,” the company explained in its motion.

It also added that disclosure will “tilt” the playing field against its stablecoin.

The stablecoin operator added that it has so far spent a great deal of time and effort to build its banking relationships. Disclosure would jeopardize this – and, by extension, the company’s business model.

The Pressure Mounts on Tether

Tether has so far faced significant questions about USDT and its backing. Things have been especially difficult as Coinbase and Circle – the operators of its biggest rival; USDC – have committed to being more transparent in their operations.

The stablecoin operator has so far made efforts to be more transparent as well, especially following its settlement with the NYAG earlier this year.

It released its Consolidated Reserves Report (CRR) last month, showing $62.77 billion in consolidated assets for the period ended June 30. The company also revealed $62.62 billion in consolidated liabilities, of which $62.61 billion were related to USDT.

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Author: Jimmy Aki

Canada’s Security Regulator Prohibits Regulated Crypto Exchanges from Trading in Tether (USDT)

Canada’s Security Regulator Prohibits Regulated Crypto Exchanges from Trading in Tether (USDT)

The Ontario Securities Commission (OSC) has put the dominant stablecoin Tether (USDT) in its prohibited crypto assets list while allowing cryptocurrency exchanges to trade in Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).

This was disclosed in the regulatory documents regarding the exemptive relief applications in multiple jurisdictions for crypto exchange Coinberry Limited – “the first pure-play crypto trading platform in Canada to be fully registered” and Wealthsimple.

These two Toronto-based cryptocurrency exchanges are the only crypto asset dealers to receive regulatory approval by the OSC to operate their platforms in all Canadian provinces and territories for two years. Evan Thomas, Head of Legal at Wealthsimple Crypto, told a local publication in a statement,

“Canadians are still waiting to see the impact of regulatory standards being consistently applied across the industry. We hope regulators will ensure other platforms bring themselves into compliance with Canadian securities laws very soon.”

Both the companies’ documents put Tether in the “Appendix C – Prohibited Crypto Assets” section. It further noted that the application filer,

“Will not trade Crypto Contracts based on crypto assets, digital or virtual currencies, and digital or virtual tokens listed in Appendix C to this Decision.”

While not allowing trading in USDT, the documents do not specify the reason behind the decision. But it does put the disclaimer that OSC’s “decision should not be viewed as precedent for other filers.”

Tether, which has a market cap of $65.7 billion, settled its lawsuit with the New York Attorney General earlier this year for $18.5 million and is required to release quarterly transparency reports. As per the settlement, the stablecoin operator is also barred from doing business in New York.

In its latest transparency report, Tether said USDT is fully backed with 75.85% of it backed by Cash & Cash Equivalents & Other Short-Term Deposits & Commercial Paper.

Late last month also came the report that the US DOJ is probing the largest stablecoin and its executives for bank fraud. Tether, however, said that it “routinely has an open dialogue with law enforcement agencies…as part of our commitment to cooperation, transparency, and accountability.”

But it looks like Canada’s securities regulator is not yet comfortable with Tether’s situation and may even perceive it as high-risk.

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Author: AnTy

Tether Releases Frozen Stolen Funds; Over $33M to Poly Network and 1.7M USDT to Yearn Hack

Tether Releases Frozen Stolen Funds; Over $33M to Poly Network and 1.7M USDT to Yearn Hack

Dominant stablecoin Tether said on Wednesday that just over $33.4 million of funds that were frozen by the company in regards to the Poly Network exploit earlier this month have now been released to its legitimate owners.

According to the transaction, the funds have been sent by the Tether Treasury to the Poly Network Multisig address. The transaction cost Tether 0.0063233 Ether ($19.58).

The decision to release the funds was made after working closely with the cross-chain network that involves “strict protocols,” it said. Tether said,

“Freezing funds is not a matter we take lightly – in being the first to act, Tether demonstrated its commitment to security and continued vigilance in ensuring the community always comes first.”

Earlier this week, Poly Network said that it has successfully retrieved all the $610 million stolen in one of the biggest ever DeFi hacks and added at the time that they are in talks with Tether about unfreezing the remaining $33 million in stablecoin, which now has been done. The team said on Thursday,

“PolyBridge has now restored cross-chain functionality for a total of 59 assets. Other advanced functions will be gradually restored.”

The Network offered its hacker a $500,000 “bug bounty” as the hacker said they did the attack to expose a vulnerability in the platform’s digital contracts and was always planning to return the funds.

Poly Network labeled the hacker as “Mr. White Hat” and offered them the job of Chief Security Advisor.

Besides unfreezing Poly Network’s stolen funds, Tether also returned 1.7 million USDT the same day, which were stolen as part of the hack of Yearn DAI v1 vault in February this year, said Paolo Ardoino, CTO at Tether and its sister company, Bitfinex, a crypto exchange.

“Really appreciate the quick reaction back in February and your assistance now,” said Banteg, the core developer of Yearn Finance.

When it comes to hacks, recently, Japanese crypto exchange Liquid’s hot wallet was also hacked for about $94 million that blockchain analysis firm Elliptic said included $5 million in Bitcoin, $31 million in Ether, and $13 million in XRP.

Early on Thursday, crypto exchange FTX CEO Sam Bankman Fried said they are extending $120 million capital to Liquid, adding “All customer assets are safe and fully backed.” No other information was shared about the composition, duration, or rate the loan was offered.

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Author: AnTy

Tether Fully Backed with Reserves Also Held in Digital Tokens and Precious Metal: New Assurance Report

Tether Fully Backed with Reserves Also Held in Digital Tokens and Precious Metal: New Assurance Report

Tether Holdings Limited has released an assurance report by Moore Cayman on Monday for the period ending June 30, as per its continued commitment to transparency.

As of writing, with a market cap of almost $63 billion, USDT accounts for 57% of the stablecoin market share. Paolo Ardoino, CTO at Tether and its sister company Bitfinex, said in a statement.

“As an industry leader, we understand the importance of transparency and accountability. Our most recent assurance opinion from Moore Cayman again confirms Tether is fully backed.”

According to the report, 85% of Tether’s nearly $62.78 billion supply is held in cash and cash equivalents and other short-term deposits and commercial paper.

Out of this $53.37 billion, almost $6.3 is in cash and bank deposits, $1 billion in reverse report notes, $15.27 billion in Treasury bills. The majority of it, $30.8 billion, is held in commercial paper and certificates of deposit whose rating ranges from A-1+ to A-3 and has an average duration of 150 days.

“Tether is fully backed. S&P provides a rating of commercial papers,” Ardoino said in a tweet.

Besides this, Tether has just over $2.5 billion in secured loans, none to affiliated entities, and $4.83 billion in corporate bonds, funds, and precious metals. Just over $2 billion is also held by Tether in other investments, including digital assets, which are valued at the lower of cost or fair market value “exceeds the amount required to redeem the digital asset tokens issued.”

The report particularly mentions Tether Gold (XAU₮), digital tokens representing ownership of physical gold. XAU₮ tokens available for sale to users but not yet sold to them are included in the consolidated group’s asset reserves. As per the report, gold is valued at fair market value.

“The group’s consolidated assets exceed its consolidated liabilities,” says Moore Cayman in the report.

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Author: AnTy

Tether in ‘Open Dialogue’ with DOJ, says Company on Report of its Executives Being Under Probe for Bank Fraud

Tether in ‘Open Dialogue’ with DOJ, says Company on Report of its Executives Being Under Probe for Bank Fraud

The dominant stablecoin with 62.15 billion circulating supply also blasted Bloomberg’s report as “repackaging stale claims” from years ago to “generate clicks,” adding that it is business as usual for the company.

The US Department of Justice (DOJ) is probing into the largest stablecoin regarding whether the executive behind it committed bank fraud during the early stages of its business, reported Bloomberg on Monday, citing three people with direct knowledge of the matter.

The agency will be looking into events from several years ago when Tether was launched in 2014 and examine whether the company concealed from banks that its transactions were linked to crypto.

The charge of bank fraud would make it a potential criminal case, and the formal charges could be brought in the coming weeks. In response, Tether said it

“routinely has open dialogue with law enforcement agencies, including the U.S. Department of Justice, as part of our commitment to cooperation, transparency, and accountability.”

Tether blasted Bloomberg’s report as “repackaging stale claims” from years ago to “generate clicks,” adding that it is business as usual for the company.

As of writing, Tether has a circulating supply of 62.15 billion, out of which nearly $31 billion is on Ethereum blockchain and almost $32 billion on Tron while the rest is spread across Solana, Omni, EOS, Liquid, Algorand, and SLP.

In total, stablecoins are all set to hit $112 billion in supply after starting 2021, around $29 billion. Tether accounts for 57.8% of this total market cap, followed by USDC, whose growing market share has reached 24.16%, and then BUSD at 10.54%.

A couple of months back, Tether released its quarterly report as part of the settlement deal with NYAG that revealed that 75.85% of Tether is backed by cash & cash equivalents.

“NYAG found we made mistakes in our disclosures re: 1-to-1 backing with dollars only. Those disclosures were rectified within just over 3 months,” said Paolo Ardoino, CTO at Tether and its sister company Bitfinex in response to Zero Hedge’s article” What Effect Would Tether Being A Complete Fraud Have On Cryptos?”

Earlier this month, the company behind USDT, Tether Operations, posted a job for a reputation manager that will “advocate” for the company in social media spaces and maintain a positive sentiment for the brand.

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Author: AnTy

Tether is Hiring a “Reputation Manager” to Fight USDT Backing FUD

Tether is Hiring a “Reputation Manager” to Fight USDT Backing FUD

Dominant stablecoin issuer Tether is looking for someone to “become an advocate for the company in social media spaces” and maintain a positive sentiment for the brand.

Tether is now looking for a reputation manager that will “advocate” for the largest stablecoin USDT with a market cap of $62.5 billion and has a 58.56% market share.

Tether Operations, the company behind USDT stablecoin, has posted a remote job to fight the FUD as it faces increased pressure and scrutiny about its reserves backing.

In May, for the first time, Tether revealed that almost 76% of Tether’s reserves were held in cash or cash equivalents which was further divided into commercial paper having the biggest share with 65%, followed by fiduciary deposits at almost 25%, and cash making up less than 3% of its reserves.

Tether is now looking for someone who is to “become an advocate for the company in social media spaces, engaging in dialogues and answering questions where appropriate.”

As the crypto market grows and matures, companies in the space have taken to handling the marketing as FTX is doing with high-profile partnerships and media as Coinbase is working on building out an entire media arm itself.

According to Tether’s job listing, which appears on multiple job sites, this “mid-senior” level position is looking for five years’ experience in social media management, and the candidate must have “great ability to identify potential negative or crisis situations and apply conflict resolution principles to mitigate issues.”

The candidate is also required to demonstrate “winning Social Customer Service techniques such as empathy, patience, advocacy, and conflict resolution.”

In addition, they would identify threats and opportunities in user-generated content surrounding the company and maintain a positive sentiment for the brand.

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Author: AnTy

Strike Dumps Tether, Set To Partner With Banks for El Salvador Remittances

Strike Dumps Tether, Set To Partner With Banks for El Salvador Remittances

  • Lightning network solution provider Strike is making big moves for remittances in El Salvador.
  • The startup would no longer use Tether’s USDT stablecoin as a US dollar substitute on its network.
  • The Chief Executive Officer of Strike, Jack Mallers announced this on the “What Bitcoin Did” podcast.

Mallers Says He No Longer Needs USDT

Mallers revealed that his firm would be integrating with the top five banks and two biggest cashpoint distributors in El Salvador. He said the cashpoint stores would enable people to exchange cash for balances on a mobile app like Strike and vice versa.

The integrations would remove the need for USDT because Strike would be able to hold customers’ balances at the banks. It would also give them more places to cash out those balances for fiat currencies.

USDT was included in Strike’s beta pilot released in January after Mallers learned that keeping dollars on users’ behalf would be illegal.

Hence USDT, the largest stablecoin, had to serve as a surrogate for dollar remittances sent to El Salvador through the Strike platform. Mallers said,

“We built Tether into Strike which was the equivalent of the Chase bank account in America and at least gave us some MVP basic functionality.”

The plan was for Strike to debit the bank account of a sender, convert it to Bitcoin, and forward it to the company’s Central American infrastructure; and then convert it to USDT which will then be credited to the recipient’s account.

In the recent podcast, Mallers said he only included USDT due to the limited options he had initially.

This change by Mallers comes less than a month after he introduced El Salvador President Nayib Bukele to the Bitcoin community at a Miami conference.

Bukele had then announced the partnership with Strike to build a financial infrastructure using Bitcoin. This was before the country made international headlines for becoming the first to make Bitcoin a legal tender.

Concerns Surrounding Tether’s Backing

Mallers’ recent removal of Tether from his network may come as a relief to those concerned about USDT’s backing.

For a long time, Tether has been the subject of controversy about whether its stablecoin is fully backed with dollar reserves. Last month, Tether revealed the breakdown of its reserves for the first time.

Tether stated that the bulk of Tether’s reserves are in cash, equivalents, or other short-term deposits, with the remainder in secured loans, corporate bonds, and other investments.

The breakdown of funds comes as part of a settlement with the New York State Attorney General (NYAG) which probed into its finances in February.

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Author: Jimmy Aki

Tether (USDT) Launches on Avalanche Which is Burning Fees at Increasing Speed

Tether (USDT) Launches on Avalanche Which is Burning Fees at Increasing Speed

The Largest stablecoin with a market cap of nearly $59.5 billion, Tether is further expanding to now cover Avalanche as well.

Launched in late 2014, Tether is already supporting Bitcoin, Ethereum, EOS, Liquid Network, Omni, Tron, Algorand, and Solana blockchains. Paolo Ardoino, CTO at Tether said,

“We are delighted to initiate USDt’s launch on Avalanche.”

“The launch of USDt on Avalanche will provide traders with a fast, cost-effective way to transfer USDt across different exchanges.”

Avalanche is a decentralized smart contracts platform, on which activity has been surging ever since the launch of the Avalanche-Ethereum Bridge (AEB) earlier this year. Since the launch in Feb., 100,000 unique addresses have been created, and users have executed more than 2 million smart contract transactions. Emin Gün Sirer, Director of the Avalanche Foundation said,

“Having USDt launch natively in Avalanche adds another core infrastructure to the rapidly expanding DeFi ecosystem on the platform. It will be a welcome addition to users and developers propelling this continued growth.”

Avalanche’s native token, AVAX, is a hard-capped asset used to pay for fees on the network. It also secures the platform through staking.

With a market cap of $633 million, AVAX is sitting at 40th place and currently trading at $34.73.

The network went through an upgrade in March that reduces the fees by 50% but still accounts for some of the highest fees among the layer-1 solutions, showing real user demand. Fees on Avalanche are burned, which means it benefits all network participants.

Avalanche users have actually burned more fees on smart contract transactions in the six weeks since the Apricot Phase 1 Upgrade than in the first six months of its mainnet.

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“Fees for Avalanche users got significantly cheaper, but the burn rate increased as more users, applications, and assets joined the network,” noted Patrick Sutton & Farid Rached of Ava Labs.

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Author: AnTy