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Tether claims it’s fully backed after the court rejects the request to conceal records

Tether claims it's fully backed after the court rejects the request to conceal records

Amid overall concerns about the stability of stablecoins following the TerraUSD crash, Tether (USDT) has maintained that its reserves are strong and fully backed.

Tether, through its 2022 Q1 quarterly assurance opinion, stated on May 19 that the company’s current reserves are characterised by more consolidated assets than liabilities.

“Today, Tether Holdings Limited made available its latest quarterly assurance opinion demonstrating the strength of its reserves revealing significant reductions in commercial paper investments and an overall increase in U.S. treasury bills. It also demonstrates that the group’s consolidated assets exceed its consolidated liabilities,” the business said.

The opinion also claimed that the reserves had recorded a drop in commercial paper investments alongside an increase in U.S. treasury bills. 

Concerns about Tether’s reserves accelerated after it emerged that investors withdrew over $7 billion following USDT’s brief drop below the dollar peg.

Tether states papers holding dropped 17%

According to Tether, the largest stable coin in the crypto market, the commercial paper holding has dropped 17% from $24.2 billion to $19.9 billion over the past quarter. The company claimed that a further 20% reduction kicked in on April 1, 2022.

Overall, for 2022 Q1, Tether stated its consolidated cumulative assets stood at about $82.4 billion. However, the statement did not mention the consolidated total liabilities for the quarter. 

Elsewhere, the company claimed that it had invested $39.2 billion in the money market funds and U.S. treasury bills from $34.5 billion. 

After reports indicating that Tether might follow suit and crash like TerraUST, the company’s CTO Paolo Ardoino revealed that the stablecoin has already demonstrated its strength. 

“Tether has never once failed to honour a redemption request from any of its verified customers. This latest attestation further highlights that Tether is fully backed and that the composition of its reserves is strong, conservative, and liquid,” said Ardoino. 

Tether’s request blocked by court 

The notification by Tether comes after the company had sought to block the public from viewing the reserves composition. As reported by Finbold on May 18, a petition by Tether before the supreme court of the state of New York over disclosure of reserves was blocked. 

Notably, the move seeking publication of reserves was first initiated by CoinDesk. However, in February, lawyers representing Tether and its parent company, iFinex, moved to court for orders to block the request. 

According to the attorneys, the objection was meant to bar competitors from accessing the ‘confidential information.’ 

Calls to have the company disclose the composition of its reserves emerged last year in July, while Ardoino has maintained that stablecoin is fully backed. 

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