Tether Says Its Stablecoin Is Fully Backed Again

USDT tokens are now fully backed by Tethers reserves, the stablecoin issuer said Thursday.

Tether published a response to what it described as a flawed paper written by John Griffin, a professor of finance at the University of Texas at Austin, and Amin Shams, an instructor the Ohio State University which claimed a single address on the Bitfinex exchange was responsible for manipulating the bitcoin market in late 2017, sparking the bull market. The paper was an update to a version first published in the summer of 2018.

Tether pushed back on this claim, saying in Thursdays statement that the revised paper is a watered-down and embarrassing walk-back of the first version.

Perhaps more intriguing, however, was the claim that All Tether tokens are fully backed by reserves.

Whether or not USDT is fully-backed has long been a point of contention. The company has promised an audit of its stablecoin reserves (though it has not delivered one, and has since dissolved its relationship with its auditor), produced a third-party report saying it likely had more funds than outstanding tokens, and had a bank write a letter vouching for its holdings. (The latter two reports both acted as snapshots, only assuring the crypto community that on specific days, Tethers obligations did not exceed its assets.)

Tethers backing is even the subject of an inquiry by the New York State Attorney Generals office.

Nevertheless, Tether maintained that its tokens were fully backed until April 2019, when general counsel Stuart Hoegner wrote in an affidavit that USDT was backed by cash and cash equivalents … representing approximately 74 percent of the current outstanding tethers.

At the time, Tether held $2.1 billion in assets, with 2.8 billion USDT tokens issued on the Omni blockchain. According to a block explorer, this number has fallen since then to 1.775 billion. However, a further 2 billion USDT is in circulation as an ERC-20 token

Tethers Transparency page says the company currently holds more than $4.6 billion in total assets, including $4.56 billion in U.S. dollars, $44 million in euros and $3.3 million in Chinese renminbi (amounts are converted).

In an email, Hoegner said the outstanding tokens are currently backed by reserves, adding:

According to the website and our terms of service, our reserves include traditional currency and cash equivalents and, from time to ...

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Tags: Tether, Tether, United States Department of the Treasury, Time, Stablecoin, Attorney General of New York, Ohio State University, University of Texas at Austin, Bitfinex, Professor