- Tether Holdings, the company behind stablecoin USDT, has been under speculation that its tokens are not fully backed.
- The latest assurance report from the stablecoin issuer reviewed by an accounting firm reveals that USDT is fully backed by the firm’s reserves.
- Tether had a total of $62.8 billion in total assets at the end of June, a $21.8 billion increase from Q1.
Stablecoin issuer Tether Holdings Limited recently reiterated that its digital tokens are fully backed by reserves, seeking to put speculation to an end. The latest attestation report from the company provided details of its $62.8 billion in assets backing USDT.
Tether meets reserve obligations
An accounting firm based in the Cayman Islands, Moore Cayman, reviewed Tether’s Consolidated Reserves Report and came to the conclusion that the stablecoin company has met its reserve requirements for the reporting period that ended in late June.
At the end of the first quarter this year, the USDT issuer released its first-ever attestation report, which included the details of assets and liabilities and further published the composition of its reserves in May, noting that around 50% was held in commercial paper (CP).
Prior to the release of its first report, Tether Holdings was required to disclose its reserves and liabilities as part of its settlement deal with the New York Attorney General’s (NYAG) office earlier this year.
The NYAG alleged that Tether and Bitfinex attempted to cover up a loss of roughly $850 million in customer funds. The cryptocurrency firms settled the charges relating to financial mismanagement and agreed to pay an $18.5 million fine.
As a result, Tether and Bitfinex were not allowed to conduct trading activity in New York, and the firm was ordered to submit quarterly transparency results. The legal battle that started in April 2019 was put to an end.
In the recent transparency report for the period that ended on June 30, Tether provided a composition of its reserves along with the list of the ratings and maturity of its CP and certificates of deposit (CD).
As of June 30, Tether had $62.8 billion in total assets, an increase of $21.8 billion compared to the previous quarter.
Tether’s report showed that 49% of its reserves were held in CP and CDs, and 93% of its assets were rated A-2 and above, with 1.5% below A-3. Around 47% of the CP and CDs were rated A-1, and while 0.5% were rated above A-1.
According to Tether, these ratings are referred to as the credit ratings by Standard & Poor’s when it is available. Other publicly accessible industry-standard conversion rates would also be used to convert the ratings from Moody’s or Fitch to the S&P equivalent, the company said.
The latest report also revealed that Tether holds US Treasury bills and reverse repo notes that make up 24.3% and 1.6% of the total, respectively. Its other reserves were held in cash and bank deposits, making up 10% of its total reserves.