By Tether the USDT stablecoin recently updated its website stating that its dollar-backed coin might not be backed 100% by fiat reserves.
The updated text on the site states that while the stablecoin in 100% backed, its reserves could sometimes include other asset classes.
The web page reads:
Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).
Notably, Tether’s previous terms as displayed before the update read as:
“Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.”
Tether has for some time been under scrutiny from many crypto enthusiasts as to whether it indeed has the proportionate reserves to back its 1.9 billion USDT in circulation, with one report stating that it does, at least during certain time frames.
Back in December 2018, Bloomberg News reported that it had seen Tether’s bank statements and claimed that during four separate months, that the firm had indeed held sufficient dollars to back its USDT tokens in circulation.
As we know, most of the controversy surrounding the firm pertains to the fact that Tether has never fully provided an independent audit of its collateral. That being said, in November 2019 the firm released a letter from Deltec Bank, a Bahamas-based bank as proof of its reserves.
Tether along with its sister company, the crypto exchange Bitfinex was reportedly subpoenaed by the U.S Commodity Futures Trading Commission back in December 2017, however, it was not stated by they were at the time.
Lastly, the two companies have also in the past been accused by researchers of manipulating bitcoin prices via the use of USDT.
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