Despite rumors and criticism, Tether Holdings seeks to promote global awareness of its positive attestation for the first quarter. The company reported that it withdrew over $4.5 billion from banks during the first quarter of 2023, resulting in a significant reduction in counterparty risk. The latest attestation by BDO Italia was highlighted as evidence of Tether’s financial stability.
During the first quarter, Tether’s market capitalization for its USDT stablecoin increased from $66 billion to over $82 billion. Concurrently, Tether underwent a substantial reduction in its bank deposits, slashing the amount from $5.3 billion to $481 million—a decrease of over 90%. The remaining bank deposits are now distributed among multiple banks, a reference to Tether’s competitors who faced losses due to recent bank failures.
Simultaneously, Tether bolstered its United States Treasury bills holdings to an unprecedented peak surpassing $53 billion, which represents 64% of its reserves. In combination with other assets, Tether’s USDT token now enjoys 85% backing from cash, cash equivalents, and easily liquidated short-term deposits, ensuring seamless redemption capability. Additionally, Tether disclosed its holdings of gold and Bitcoin in this quarter’s attestation, emphasizing its commitment to transparency. The company highlighted its financial achievements compared to other well-known companies such as BlackRock, Netflix, Starbucks, Cash App, and PayPal.
Tether has been diligently working to enhance its financial indicators and has made efforts to showcase its successes. In June, it announced plans to reduce commercial paper in its reserves from $20 billion to $8.4 billion by the end of the month and to eliminate it entirely by year-end, successfully achieving that goal.
Despite its accomplishments, Tether has faced persistent scrutiny and allegations about its financial standing. In 2021, the company was fined $18.5 million by the New York attorney general’s office for misrepresenting the fiat backing for its reserves. The settlement also mandated greater financial transparency from the stablecoin issuer.
This month, Tether engaged in a lengthy and constructive Twitter discussion with John Reed Stark, the former head of the U.S. Securities and Exchange Commission’s internet enforcement office. Stark referred to Tether as “a Mammoth House of Cards” and highlighted the company’s unfulfilled promise of a full audit within a few months.
While the recent attestation provides some insight into Tether’s financial well-being, it should be noted that attestations are generally limited in scope and do not offer an external opinion on the company’s overall financial condition.
