Tether Refutes Bloomberg Report Accusing it of Diverting Reserves to Risky Investments
Tether (USDT), the biggest stablecoin issuer by market value, has denied the accuracy of a Bloomberg report on its reserves holdings. Bloomberg journalist Zeke Faux made multiple statements against Tether in a Thursday report, including that its CFO Giancarlo Devasini has utilized the company’s reserves to make investments, which seems to question Tether’s public position that the holdings were completely backed at all instances.
Furthermore, Faux claims that Tether has acquired stakes in Chinese companies and made crypto-backed loans “valued several billions.” He was only successful in establishing that one bank in the Bahamas was dealing directly with Tether, as per the article.
“Tether has yet to reveal where it keeps its money,” Faux added. “If Devasini is willing to take enough threat to make just a 1% yield on Tether’s total reserves, he and his associates would reap $690 million each year. But if only a tiny fraction of those loans falter, one Tether will drop below $1.”
Tether described the article as a “tired effort” to destabilize the business based on “innuendo and disinformation.” The stablecoin issuer dismissed Faux’s claims as an effort “to defame Giancarlo Devasini and Tether’s management,” and maintained that its USDT coins are “completely supported,” citing quarterly assurance reports.
As portion of a deal with the New York Attorney General’s Office in February, Tether and Bitfinex acknowledged to pay $18.5 million in restitution to the state of New York and submit comprehensive financial reports — the most current audit was presented with data provided as of June 30. Tether was accused by authorities of misrepresenting the extent to which its USDT tokens were pegged to fiat collateral.
The Bloomberg story comes as many wonder if Evergrande Group, China’s second-largest property developer, would default on $300 billion in loans. Tether, as per Faux, strongly denied possessing any debt from Evergrande but would not disclose whether it owned corporate debt from other Chinese companies.