Deltec, the Tether (USDT) banker based in the Bahamas, says the popular stablecoin is fully-backed, downplaying long-standing reports of the integrity of its client’s reserves. The declaration is coming as both Tether and Bitfinex are submitting documents to the New York Attorney General (NYAG) concerning an $850 million embezzlement case from April 2019.
Tether is More than 100% Backed by Fiat Reserves
Appearing on an episode of Laura Shin’s Unchained Podcast, Gregory Pepin, deputy CEO at Deltec clarified Tether’s reserve status, stating:
“Every tether is backed by a reserve and their reserve is more than what is in circulation. We can see it first hand, so I can confirm that.”
Pepin’s remarks offer an improved assessment of the level to which Tether is backed with one of the company’s lawyers revealing in 2019 that the popular stablecoin was only 74 percent backed by fiat reserves. The extent of Tether’s fiat currency reserve has always been a source of intense speculation within and outside the cryptocurrency space.
Sitting on a market capitalization north of $24 billion, Tether facilitates a major chunk of the global crypto trading market. Indeed, a cross-section of the industry has expressed fears that the market could collapse if the popular stablecoin were to fail.
Indeed, Tether, along the decentralized finance (DeFi) market is also a major contributor to the increased level of activity on the Ethereum network leading to high network fees when the chain becomes overly congested.
As previously reported by BTCManager, more USDT is now being routed to the Tron network than on Ethereum. This news marks a reversal of the trend reported in September 2020 when the company announced plans to swap 1 billion USDT from the Tron to the Ethereum network.
The Deltec CEO also cleared the air on reports that the bank recently acquired Bitcoin on behalf of its clients. According to Pepin, the purchase was not done on behalf of Tether, stating: “We have a very competent and well-respected investment team. And as part of their portfolio education for customers, they actually did an allocation in bitcoin on behalf of those customers.”
Meanwhile, reports indicate that the Tether Treasury might be audited in 2021. Lawyers for both Bitfinex and Tether are still submitting documents to the NYAG in the $850 million embezzlement case against the two companies.