Tether, the stablecoin issuer, has responded to reports that its reserves once included securities issued by Chinese state-owned companies. Tether clarified that the information presented is outdated, and its exposure to Chinese commercial papers has been reduced to zero.
The response comes amid ongoing scrutiny and criticism regarding the transparency of Tether’s reserve holdings and highlights the importance of transparency in the stablecoin industry.
Recently, the mainstream media outlets, including Bloomberg, reported that the company once used held securities issued by Chinese state-owned firms. Bloomberg cited documents released by New York’s Attorney General (NYAG) and highlighted that USDT was once backed by securities from firms like the Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Meanwhile, In the same day, the USDT issuer responded to the reports, writing:
“Ultimately Bloomberg, CoinDesk or any other media outlet’s decision to present this information to its readers was likely done in haste with little attention to current events or facts.”
However, in the previous years, Tether reached a settlement with the New York Attorney General’s office over accusations of misleading information about its reserves and losses. The settlement involved providing documents and information to the NY AG, shedding light on Tether’s reserves as of March 31, 2021.
While the attestation report for Q1 2021 showed Tether’s reserves worth $81.8 billion, consisting of US Treasuries, Bitcoin, and over-collateralized loans, it did not reflect the previous inclusion of Chinese securities. Tether’s response aims to address the concerns raised by the reports and reassert the stability and transparency of its current reserve holdings.
The stablecoin issuer also noted that its exposure to commercial paper holdings was reduced to zero last year. According to Tether, it did not lose any money on any commercial paper. This includes commercial papers issued by Chinese firms.
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