Does Tether really have $1.8 Billion back up funds? New report casts doubts

26 Dec, 2018
by Arthur Sillers
Does Tether really have $1.8 Billion back up funds? New report casts doubts

CryptoSlate has today unearthed some new evidence from the Central Bank of the Bahamas which sheds doubts onto Tether’s claims that its stablecoin is backed up by USD.

Earlier this week, Tether gave seemingly convincing evidence that they indeed had, as they have always claimed, stashed enough money in a Bahamian bank to backup every single one of their USDT stablecoins, a claim which has consistently been questioned by skeptics. Case closed, right?

Well, Maybe not.

The evidence which Tether points to in order to prove their holdings center around a letter which contains a claimed confirmation from the Bahamian Deltec bank which states that Tether indeed holds $1,831,322,828 - enough to ensure every last Tether stablecoin.

CryptoSlate points out that not only does the document not contain any signatures or other proof of authorship (or even the name of anyone in particular from the bank) but Deltec has in fact not confirmed or denied their relationship with Tether. While this might mean that the letter is not a silver-bullet for Tether’s holdings authenticity, perhaps more worrying for USDT holders is that Tether’s deposits into the Bahamas are not reflected in economic reports from the island's government, whose economy is small enough that a $1.8 Billion deposit should show a demonstrable effect on Bahamian economic data.

The deposit that Tether claims to have made in Deltec would show up as an ‘M2 holding,’ which are publicly available. If Tether had deposited the money when they said they did, then the M2 holdings should have increased by $1.8 billion between November and June. The M2 holdings did not see a large change, and cross-referencing the change in foreign investment (which, in theory, might account for the lack of change in the M2 figure) didn't show that a large sum of money was taken out of investment.

The full report from CryptoSlate has more details, and lays a convincing case that Tether hasn’t fully proven that each USDT is backed up. While CryptoSlate isn’t directly accusing Tether of lying, it does convincingly show that there is still some room for doubt.

Read more: Tether briefly overtook Stellar's XLM as the fourth largest cryptocurrency

Because the M2 figure didn’t change, and because there was no confirmation from the bank representatives, there is no direct evidence that Tether really does have the cash to back up its USDT token. This doesn’t mean that it doesn’t have the funds, and the fact is that there is also no direct evidence it does NOT have the funds it claims- it simply can’t be directly verified either way.

In fact, some sleuths on Twitter have even pointed to some movement of funds in and out of Bahamanian national banks as possible indication that Tether purposely deposited money into the Bahamas, only to quickly move it out in order to use those ledgers as evidence that they had the funds all along.

Tether might be able to prove that it really has the funds, but it hasn't yet done so - and Tether’s critics are likely not going to be silenced until that incontrovertible proof is fully laid bare.

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Read more about:Tether (USDT)


Does Tether really have its USDT backed up?

(29 votes)

Add a comment

Yeah, I think it has. And all the users are happy about how Tether is doing now
26 Dec, 2018 - 04:34
The Deltec letter which they have publicly confirmed is authentic refers to a “ portfolio cash value”. This is not “cash”. So theoretically the 1.8bln could have landed in Bahamas and some or all of it could have been used to buy securities or assets in another financial center. These securities or assets may not be within the scope of M1 or M2 that is reported by the central bank of Bahamas. I would guess that these assets or securities are very liquid and could be cashed in very quickly if there was a redemption of Tether’s. I think questions need to be asked about the journalists motives and whose payroll he is on with the monthly “questions surround Tether’s USD backing” articles. Bloomberg picked up on this 2 months ago and last week published a follow up article saying there was no evidence tether wasn’t fully backed. I think I would trust bloomberg as a news source rather than Mitchell Moos
27 Dec, 2018 - 22:56
Greedy journalists and Tether's competitors still trying to undermine it. I don't suppose that this screenshot with "publicly available" data is a good evidence. If it is publicly available then why wouldn't you provide a direct link on that DB?
26 Dec, 2018 - 09:07
Only in november you have posted an article that Deltec had indeed confirmed that paper

Are you kidding me?
26 Dec, 2018 - 16:20
Oh wow, more doubts. You know, it's just looks like a vicious circle to me. First they say that there's a report on tether and it's backed, then they say that the report is wrong and tether is not backed. And it just goes on and on and there's really no proper distinct facts.
27 Dec, 2018 - 21:29
anyway it's so ...soo... suspicious 4 me. i don't think tether has any manipulates with market - BF (bitfinex) which created it too weak to manipulate it.

it's just my minds for now.
28 Dec, 2018 - 12:38
but where are all evidences??????? i do not see them!
29 Dec, 2018 - 15:20
Everyone knows that Tether has no any similar analogs. Moreover, we see the news and necessary confirmation of the financial status of Tether. Taking the above I conclude that Tether is a reliable stablecoin.
30 Dec, 2018 - 22:41
I don't see any reasons not to trust Tether so I think yes, it is a reliable stablecoin and it has the necessary funds.
03 Jan, 2019 - 20:51
I believe to Tethers team. they are doing good job.
04 Jan, 2019 - 19:38
I have no idea if it is true, but I have no doubts about tether so yes, it is ok
08 Jan, 2019 - 04:26
As for me Tether is the most reliable stablecoin and I trust such information. I keep and eye on the market and don't see any negative reasons not to trust tether.
08 Jan, 2019 - 21:29
I'm sure that Tether is the best stablecoin nowadays. As for me it's absolutely clear.
09 Jan, 2019 - 21:29
read an article where there were evidence of clear job of Tether. dont see any issues there
17 Jan, 2019 - 17:29
i believe that Tether is reliable stablecoin
moreover, it's the only having the best rating and a big amount of good reviews
17 Jan, 2019 - 22:17
This is the only way to blame tether.
I think they follow their promises
18 Jan, 2019 - 09:20
tether wouldn't spoil its name with a fake audit
23 Jan, 2019 - 22:15
show a normal evidence regarding tether.... not this
25 Jan, 2019 - 22:38
well there is an audit published by independent audit firm that shows that tether had financial back up around $2 billions of cash. there are no real reasons for worries
09 Feb, 2019 - 11:28
these doubts and gossips around tether are based on assumptions that can not be proved. same as always, this stablecoin is being accused in almost everything however no one had ever provided a single fact
09 Feb, 2019 - 11:53
i personally have seen tons of reports like this that are not reliable at all. tether is financially stable and each of their tokens is pegged to one US dollar
11 Mar, 2019 - 16:13
i personally tend to believe in this documents that tether has financial support to back up all the tokens that are issued by this organization
12 Feb, 2019 - 15:32
recent article from bloomberg has actually confirmed that tether has full financial security of it's tokens as well as it's audit that was held in 2018
16 Feb, 2019 - 10:07
this gossips about tether become really annoying. several times it was proved that tether is financially secured and has back up to support all the issues tokens
21 Feb, 2019 - 11:56
tether has proved several times that it has full financial support for the tokens and i personally trust this stable coin
22 Mar, 2019 - 09:53

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