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News

CoinDesk Obtains Tether’s FOIL Documents Revealing After USDT Lost Its Peg

June 17, 2023 - Around 3 mins mins to read

Key Points:

  • Tether’s FOIL documents reveal important information about its banking relationships, asset backing strategy, and reliance on commercial paper.
  • CoinDesk stands by the integrity of its reporting on Tether, including the release of FOIL documents obtained after a court dispute, which coincided with USDT losing its peg.
CoinDesk received Tether documents on June 15 after a court dispute, hours after USDT lost its peg. CoinDesk stands by reporting integrity.
CoinDesk Obtains Tether's FOIL Documents Revealing After USDT Lost Its Peg

Tether’s recent release of FOIL documents obtained by CoinDesk has revealed important information about the stablecoin’s banking relationships and asset backing strategy. As the world’s largest stablecoin, USDT plays a significant role as the counterparty asset for countless crypto trades on exchanges.

The documents reveal that Tether had more than $35.5 billion in U.S. dollar equivalents at various institutions, with a further $5.1 billion in “USDT lending” and other assets. The vast majority of its reserves were held in Bahamas-based Deltec Bank and Trust, with several other banks and investment management firms also holding Tether’s funds.

Of particular interest is Tether’s reliance on commercial paper, which makes up a significant amount of its reserves. While the company has acknowledged its use of commercial paper in the past, the extent to which it relied on this asset type was not previously known. The FOIL documents confirm that several Chinese banks and financial institutions, such as Agricultural Bank of China, Bank of China, and China Construction Bank, issued Tether’s commercial paper and securities.

CoinDesk Obtains Tether's FOIL Documents Revealing After USDT Lost Its Peg

The revelation about Tether’s commercial paper holdings is significant because commercial paper is a short-term unsecured debt instrument that is considered riskier than other types of debt. The extent to which Tether relied on commercial paper raises questions about the stability and trustworthiness of USDT as a stablecoin.

According to CoinDesk, the release of the FOIL documents comes after USDT briefly lost its peg on Jun. This event led to questions about the stability of Tether’s reserves and asset backing. While the documents do not prove or disprove concerns about USDT being less than fully backed, they do offer a rare but limited glimpse into Tether’s finances.

The documents also provide insight into Tether’s asset backing strategy and banking relationships, which have long been a subject of speculation in the crypto industry. The revelations about Tether’s banking relationships and $40.6 billion reserves will undoubtedly have implications for the industry.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Thana

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Thana

I am a news editor at Coincu, where I produce daily editorial packages and manage the knowledge and review article sections. Before journalism, I earned a Bachelor's degree in Global Logistics and Supply Chain Management from Northampton University and studied news journalism at Press Association Training.
News

CoinDesk Obtains Tether’s FOIL Documents Revealing After USDT Lost Its Peg

Key Points:

  • Tether’s FOIL documents reveal important information about its banking relationships, asset backing strategy, and reliance on commercial paper.
  • CoinDesk stands by the integrity of its reporting on Tether, including the release of FOIL documents obtained after a court dispute, which coincided with USDT losing its peg.
CoinDesk received Tether documents on June 15 after a court dispute, hours after USDT lost its peg. CoinDesk stands by reporting integrity.
CoinDesk Obtains Tether's FOIL Documents Revealing After USDT Lost Its Peg

Tether’s recent release of FOIL documents obtained by CoinDesk has revealed important information about the stablecoin’s banking relationships and asset backing strategy. As the world’s largest stablecoin, USDT plays a significant role as the counterparty asset for countless crypto trades on exchanges.

The documents reveal that Tether had more than $35.5 billion in U.S. dollar equivalents at various institutions, with a further $5.1 billion in “USDT lending” and other assets. The vast majority of its reserves were held in Bahamas-based Deltec Bank and Trust, with several other banks and investment management firms also holding Tether’s funds.

Of particular interest is Tether’s reliance on commercial paper, which makes up a significant amount of its reserves. While the company has acknowledged its use of commercial paper in the past, the extent to which it relied on this asset type was not previously known. The FOIL documents confirm that several Chinese banks and financial institutions, such as Agricultural Bank of China, Bank of China, and China Construction Bank, issued Tether’s commercial paper and securities.

CoinDesk Obtains Tether's FOIL Documents Revealing After USDT Lost Its Peg

The revelation about Tether’s commercial paper holdings is significant because commercial paper is a short-term unsecured debt instrument that is considered riskier than other types of debt. The extent to which Tether relied on commercial paper raises questions about the stability and trustworthiness of USDT as a stablecoin.

According to CoinDesk, the release of the FOIL documents comes after USDT briefly lost its peg on Jun. This event led to questions about the stability of Tether’s reserves and asset backing. While the documents do not prove or disprove concerns about USDT being less than fully backed, they do offer a rare but limited glimpse into Tether’s finances.

The documents also provide insight into Tether’s asset backing strategy and banking relationships, which have long been a subject of speculation in the crypto industry. The revelations about Tether’s banking relationships and $40.6 billion reserves will undoubtedly have implications for the industry.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Thana

Coincu News

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