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A location of mysterious Tether reserves revealed – a boutique bank in the Bahamas



 USDT issuer Tether holds an undetermined percentage of the assets in a boutique bank in the Bahamas.


Tether's cash reserves and other financial instruments are currently under scrutiny . People familiar with the matter revealed to the Financial Times that Tether holds an undisclosed percentage of the reserves at a boutique bank in the Bahamas.


Liquidity is not a problem

Tether is a private company issuing fiat-backed stablecoins in the US, Mexico, Europe and China . So far, the company has refused to disclose the partners within the limits of its rights. " Our partners are not public because we are not a public company ," a senior executive told the Financial Times .


Brock Pierce and Craig Sellars founded Tether in 2014. Since then, the stablecoin USDT has offered crypto traders and investors an easy way to buy other cryptocurrencies without having to leave the digital asset ecosystem. Traders can easily exchange a USDT coin for US dollars.


Just recently, Tether lost its dollar peg, falling to $0.95, prompting many holders to convert USDT to fiat currencies. The company has already made $10 billion worth of buybacks. According to Chief Technology Officer Paolo Ardoino, this is evidence that sufficient liquidity is available to support the stablecoin.

Tether partners revealed

So far, Tether has kept a low profile about its connection to Capital Union Bank. Bank spokespersons stated:


“All information that is publicly available about our company is in our annual report.”


Capital Union was founded nine years ago and held $1 billion in assets as of 2020. However, Tether confirmed its connection to another bank in the Bahamas, Deltec Bank & Trust. The head of the bank told Bloomberg in 2021 that the bank holds 25% of Tether reserves in the form of cash and bonds. In early May 2022, Ardonio confirmed to the Financial Times that the company holds cash reserves in two institutions in the Bahamas, one of which has "strong financial relationships" with several banks worldwide.


Last year, Capital Union hired a digital asset manager. The company began using compliance software from analytics firm Chainalysis in April this year.


The Commodities and Futures Trading Commission (CFTC) fined Tether $41 million last year. The company falsely claimed to hold cash reserves in banks to maintain pegging of stablecoin USDT. The CFTC and Tether reached an agreement without confirming or denying the allegations.


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All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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