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24 February 2021

Tether Settlement: Four Biggest Takeaways From Landmark Lawsuit - Decrypt

Tether Settlement: Four Biggest Takeaways From Landmark Lawsuit - Decrypt


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But Tether has raised suspicions in the past for inconsistent claims about how much money it’s actually holding, and for issuing new USDT en masse: billions of new coins have been summoned up this year, and detractors claim Tether doesn’t have the money to back them all.

So 1 USDT is always equivalent to 1 USD.” But Tether changed its tune in February 2019, claiming that each USDT is actually backed 100% by “reserves”—an ambiguous term that can include fiat currency, the company said, but may also involve “other assets and receivables from loans made by Tether to third parties.”.

Later on in the document, the OAG writes that for a period of time in 2017 (when Tether was still making the 1-to-1 USD to USDT claim), the company only had $61 million on hand for the 442 million USDT in circulation.

As a response to worries that USDT wasn’t fully backed, Tether released a “transparency update” on September 30, 2017, which included a bank statement showing $442 million in cash.

The findings also claim that between March and September of 2017, Tether “did not have a significant bank relationship in its name.” Per the OAG, this is because Wells Fargo—which had been processing the Tether and Bitfinex’s wire transfers to Taiwanese banks up until that point—decided to end its relationship with the companies

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