The CEO of Tether Jean-Louis van der Velde’s has deleted his Twitter account following a Bloomberg report questioning the firm’s backing of its reserves. Tether responded, calling the report misleading and saying the USDT was fully supported.
Tether’s CEO has deleted his Twitter account following a recent Bloomberg report. The article makes several claims, including that Tether owes billions to Chinese investors. The exit said that he had obtained documents showing a reserve account at Tether Holdings, which includes “billions of dollars in short-term loans to large Chinese companies.”
The report primarily addresses the issue of Tether’s reserves backing its billions of USDT, something which has been a serious point of contention in the past. Among other things, he claims that Tether holds billions of commercial paper from major Chinese companies and that these are used to safeguard its reserves.
Tether’s response to the article was scathing, calling out Bloomberg for using questionable sources to “fit a pre-packaged and pre-determined narrative.” Tether has taken steps over the past 12 months to offer proof of its reservations. It has released some attestations of its reserves, though some investors in the market don’t believe that this is enough to quell the concerns.
Bloomberg previously reported that the Justice Department was investigating Tether executives for bank fraud. As the market’s biggest stablecoin, any impact on Tether could spill over to the rest of the market. This is a concern that has been discussed many times in the past.
As for the CEO’s final tweet, it said that “[A]nother financial enslaved dying magazine” was coming up with “FUD” and to “stay tuned,” which could be interpreted in myriad ways.
Could the SEC also investigate Tether?
There has been no official SEC notice suggesting an investigation. However, should such a development happen, the market would get a much deeper insight into the backing of Tether’s reserves.
Other outlets have claimed that Tether holds Evergrande’s trade papers, which Tether denies. Such pressure could be the breaking point for the company, which is set to face shares after years of scrutiny from investors and the media.
Social media platforms are all having heated discussions about this development. Many crypto investors have in the past criticized Tether for being opaque about its support and are eager to see what an SEC investigation might shed light on.
The SEC has hinted at an examination of Tether after the Freedom of Information Act (FOIA) indicated the same. As for the investigation of the Ministry of Justice related to bank fraud, the firm qualified these “claims expired”. The rising number of such reports and responses understandably do not give investors much confidence, but it remains to be seen how this will develop.
