Tether (TS) was able to earn around $6.6 million during the first six months of the year according to a report released by Bloomberg on December 18.
With the US Dollars reserves that it has across different banking institutions, the company is able to make several millions of interests. At the same time, citing sources with knowledge about this issue, showed that Tether’s account at Noble Bank had the necessary US dollars to back the USDT in circulation.
During this year, several controversies around Tether expanded on the internet. There were some users and enthusiasts that believed that Tether did not have enough funds to back the USDT that it had in circulation. At the same time, the stablecoin has been accused of being used to manipulate Bitcoin prices.
In this statement presented by Bloomberg, Tether had $2.2 billion dollars on its bank account at Noble Bank. This institution is located in Puerto Rico and the information is from January 31, 2018. Comparing the results with data provided by CoinMarketCap, it seems that Tether had the necessary funds to back its USDT.
The Commodities Futures Trading Commision (CFTC) has also issued a subpoena to the company after doubts related to the cash reserves it claimed it had. Due to the fact that the company was not trusted by the community and because it had some issues with Noble Bank, it couldn’t sustain its peg with the US dollar for a short period of time in October and November.
Although there are some things that now seem clearer for the crypto space, there some other issues that remain opaque in the way the company handles them. Tether did not allow its cash reserves to be audited and the report that Bloomberg cites does not say how much money Tether holds in its bank accounts.
Bloomberg wrote about this issue:
“The pattern shows up the information Bloomberg reviewed. On July 6, Bitfinex sent 100 million digital coins to Tether Ltd., according to the blockchain. The same day, Tether paid Bitfinex $100 million, a Noble bank statement shows. On July 20, $50 million was exchanged for 40 million Tethers. On July 24, it was $100 million for 100 million coins.”
This could mean that the company is working with a fractional reserve system. It might not have all the necessary US dollars to back the Tethers issued. This could only be confirmed by an official audit, which Tether does not want to perform.
Tether is the largest stablecoin in the market. It has a market capitalization of $1.87 billion and it’s the 6th crypto in the top 10. There are other stablecoins that have been launched during the last months, including Gemini USD (GUSD), USD Coin (USDC), Paxos Standard (PAX) or TrueUSD (TUSD).