Bloomberg has performed a quasi-audit on controversial stablecoin Tether and concluded that the company behind the USDT token may indeed have the financial backing it claims to. Bloomberg’s assertion comes after it reviewed some of Tether’s bank statements, which showed that, at various points in the past several months, Tether had the funds in place to back every USDT token with a US dollar. This fundamental question has been at the forefront of crypto investors’ minds for years now, and is something that Tether has tried many times to quash, without success.
The Numbers Add Up… Sort Of
Tether’s bank statements offer a better insight into their financial affairs than their previous attempts to placate concerned investors, but still fall some way short of the full audit that would ease the minds of all involved in cryptocurrency. What they do show is that on September 30, 2017, Tether had a combined $452.9 million in various bank accounts, at a time when there were 435 million Tethers in existence, showing not just a 1:1 match but in fact more backing that Tethers. On January 31, 2018, Tether held $2.2 billion in Puerto Rico’s Noble Bank Ltd, compared with 2.195 billion USDT tokens, suggesting full backing at that point too. While these statements are not a ‘smoking gun’ of proof, they add more weight to recent developments that Tether’s supposed backing may be present after all.
From Rebranding to Real Trouble
Tether debuted in 2014, rebranding from Realcoin, and was soon linked, unofficially, to the exchange Bitfinex. In 2017 an anonymous account, Bitfinex’ed, appeared on Twitter claiming that Bitfinex had paid off debts and fines with illegally printed Tether tokens. A month later Bitfinex hired a law firm, Friedman LLP, to perform a complete audit on the exchange and the Tether token. Five months later, Friedman and Bitfinex parted ways with the audit having never taken place, which only escalated the concerns around Tether.
This year has seen Tether implicated in fraudulently helping Bitcoin’s record-breaking rise in 2017, undergo an unconvincing audit and suffer a double-digit crash following Bitfinex insolvency rumors. Last month it performed a $500 million USDT token burn as part of a new banking deal that also saw an unsigned letter from the bank stating that all Tethers were fully backed by real money. None of these has slowed the rumor mill however, and until a full and complete audit takes place, even recent bank statements that show full backing won’t be enough to convince everyone that Tether is solvent.