Tether’s Reserves ‘’May Include Assets Other Than Fiat Currency’’: Website Update

Despite the hundreds of scandals over the past years regarding the controversial USDT token, the brand new one sees the website of the company silently updating the terms by stating that the reserves of the company ‘’may include assets other than fiat currency.’’ Let’s find out more about this dubious update in today’s blockchain news.

According to the web archive from February 19, 2019, Tether explained on the website that each tether token is backed 1-to-1 by a traditional currency that is held in the company’s reserves. However, on their homepage today we could read something else:

“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.’’

It is still unknown what are those ‘’other assets’’ but it seems like a part of the USD reserves are held in cryptocurrency.

This is not the first time Tether’s USDT reserves are locked up in a controversy because it is widely known about the suspicious nature of the company. Back in 2018 in June, the law firm Freeh Sporkin and Sullivan, LLP published a report where you could read that all of the USDT in circulation was backed by the US dollar completely. The CFO and the General Counsel of Tether even swore to that statement to be truthful.

However, there were multiple warnings in the report since there was not a real security audit for the reserves of the company. Also, the new statement issued by Tether on their website is a total contradiction to the FSS report’s findings.

Another firm, Friedman LLP was also hired in September 2017 in order to conduct a security audit on the USDT reserves and according to the report, all USDT in circulation were fully backed by fiat.

In November 2018, Tether opened a bank account at the Bahamas claiming that the Deltec Bank & Trust Limited conducted a full review on their activities and that $1.8 billion were verified to be held at the company’s bank account.