Tether May Be Holding Reserves At Bahamas-based Deltec Bank Amid Controversy
Tether May Be Holding Reserves At Bahamas-based Deltec Bank
Just last week BitcoinExchangeGuide had reported that Deltec Financial & Trust Services is reportedly being used by Bitfinex and Tether. Although, at that time, the reports were just rumors. Now, there is more evidence coming up that strengthens these talks.
The banking relationship between Tether, the company behind the stablecoin of the same name, and Deltec Bank was struck in recent weeks. According to people familiar with the matter, some over-the-counter trading desks have expressed interest in opening an account with Deltec Bank in order redeem USDT directly.
Earlier, Tether was banking with Puerto Rico’s Noble Bank but Noble Bank lost both Tether and Bitfinex as its client as it was on the brink of collapse. Famous Tether and Bitfinex critic Bitfinex’ed commented:
Noble’s avoidance of fractional reserve banking had formed a central part of Tether’s claims its coins had full backing. They paint a picture of a cash-strapped company desperately looking for a new cash injection. The end result is that largely unfounded rumors of a Tether insolvency are now circulating the cryptocurrency ecosystem, stoked by vaguely irresponsible and highly speculative pieces that just repeat the same old sources in increasingly hysterical ways.
Tether's former primary reserve bank, Noble, may be facing financial difficulties. However, as identified by Bloomberg, data from Puerto Rico suggests Tether may be diversifying its funds to other banks
— BitMEX Research (@BitMEXResearch) October 2, 2018
In recent days, Tether’s price has crashed to 18-month low amid worries about Tether’s solvency as well as banking difficulties. Traders frequently leverage tether as a means of buying other digital currencies, and a decline in tether prices would likely point to these market participants fleeing the stablecoin. One exchange in particular that felt the impact of this sell-off in tether was Bitfinex, where the bitcoin price premium reached an all-time high of more than 11%. At the time of Press, Tether seems to have gained some ground on USD, with it now trading at $0.982.