New York-based publication Bloomberg claims to have found a document which could answer one of the most recurring questions in the crypto industry - whether Tether Ltd., the company issuing the USDT stablecoin has enough cash reserves to back the 1.8 billion tokens currently in circulation.
As per the report, Bloomberg said it has reviewed bank statements for Tether Ltd within the space of four months and confirmed that the firm has a large cash pile backing the dollar-pegged stablecoin.
The reviewed statements according to the report “were provided by someone with access to the company’s records, and a government official confirmed their veracity.”
Although there has been a breakdown in Tether’s banking relationships through the years, the finding shows that on January 31, 2018, when there was 2.195 billion USDT in circulation, the firm had $2.2 billion in an account that it held with Puerto-Rico based Noble Bank.
Also, there are no disparities in the other three months including September and October 2017 which Bloomberg said it reviewed.
The report also acknowledged that money was exchanged between Tether Ltd and crypto exchange, Bitfinex since both companies share the same executives even at a time when the latter was the only service offering USDT to traders.
What The New Bloomberg Findings on Tether Ltd. Means For The Stablecoin
To some extent, the latest discovery will go a long way to calm fears among crypto traders and investors who allege that Tether is a scam because the company at some point did not provide monthly audits about how their tokens compare with their bank reserves.
The company did publish a proof of balance from new banking partners Deltec Bank & Trust Limited on November 1, 2018, but even that has not been enough to take the public scrutiny away. Traders diverted to using other new stablecoins which led to a 1032% increase in these fiat-backed tokens November.
Bloomberg had its fair share in compounding Tether’s woe after a report in late January that the stablecoin company got subpoenas from the Commodity and Futures Trading Commission (CFTC). But, the latest update suggests that the publication is trying to clear the air around Tether while also pulling away from the controversy.
So, it practically takes the case of cash reserve status away from Tether at least for some time to allow the company to focus on a probe by the U.S Department of Justice into whether Tether and Bitfinex used USDT issuance to manipulate crypto market prices and pump Bitcoin in December 2017.