A major client of Tether has stated that the company lends out new stablecoins in return for cryptocurrencies, while Tether’s foundation claims that it only uses real dollars to issue its tokens.
- Alex Mashinsky, whose crypto lending platform Celsius Network has borrowed from Tether, as part of a lending deal, Tether has issued its so-called USDT units in exchange for well-known cryptocurrencies.
- Mashinsky stated that new USDT is issued for loans and later destroyed after the loan is closed “so it does not permanently increase USDT in circulation.”
- The comments conflict with Tether’s commitment that it issues units of the world’s biggest stablecoin only in return for hard currency.
- Tether’s longstanding one-to-one link with dollars has been the foundation of a $70bn stablecoin that bolsters global crypto transactions and provides a smooth way to enter and move out of crypto assets such as Bitcoin and Ethereum.
- Tether’s reserve is reportedly about 4% of its total assets, or $2.5bn — as of June 2021, this was the total sum of secured loans. In contrast, earlier this year, their value stood at 12.6%.
US federal and state regulators have imposed tens of millions of fines on Tether after discovering that they had previously misrepresented its reserves.
USDT USD up +0.02%
Source: FT
