After weeks of speculation regarding the banking arrangements of the controversial stablecoin, tether has now confirmed where its money currently lies. In an official statement, Tether announced that it is working with Deltec Bank and Trust Limited which is now headquartered in the Bahamas. Tether has also reassured the public that the USDT supply in the market today is backed by US dollars.
New Partner To Reduce Tethers Troubles
Tether reports that the 72-year-old financial institution decided to work with it after carrying out a detailed analysis of their company.
“Deltec Bank did an assessment which included a diligent review for our policies and procedures, compliance processes, background check for the shareholders as well as the beneficiaries of our company,” stated the report. The company further added that the assessment process was completed in seven months, and that the financial institution would continue to carry out more reviews in the future.
The post further reiterated that Tether Limited is listed in the financial crimes enforcement network and strictly adheres to the AML/CFT procedures. It also published a confirmation letter from Deltec showing that its current deposits match with the current USDT circulation. Interestingly, the amount confirmed by Deltec –around $1.8 billion- is the same as the current tether market capitalization. It, however, does not provide evidence that the reserves were still there a month ago when the amount was over $1 billion. This is because the company has never had a legal audit which can prove the existence of the dollar reserve which backs up the supply of USDT. The point was quickly jumped on by the skeptics and longtime observers of the pegged crypto.
The announcement will most likely quell the rumors that the controversial stablecoin was at the brink of collapse following its previous relationship with Noble Bank which was reported to be insolvent. The account balance confirmation will also relieve the investors and traders after having watched the USDT value drop by 4% when the rumor of Binance delisting the stable coin started. Bitfinex had also been affected by the stories which linked it to tether on the grounds of Bitcoin price manipulation allegations. As a result, Bitfinex suspended its cash deposits followed by fear, uncertainty, and doubts from the investors of USDT being delisted. Many investors sold off during that time and the price of tether dropped to as low as $0.95. The token had to be immediately withdrawn from the market to maintain its price and value.
The rapidly growing competition from Gemini’s GUSD and Circles USD Coin among other regulated stablecoins is also said to have affected tether’s market share.
Mike Novogratz, among other analysts had remarked that lack of transparency in the controversial stablecoin could hurt its market performance. The announcement will now act as the initial step that tether has taken to not only restore trust but also help it to maintain its first position in the coin market.
Tether traded at $0.992952 at time of press release, and its market cap was at $1.77 billion, according to CoinMarketCap’s chart.
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