Tether responds to everything

Odaily资深作者

2023-06-16 13:50

This article is about 3575 words, reading the full article takes about 6 minutes

Eleven questions, eleven answers.

At around 8 o'clock tonight, Beijing time, Tether officially released a long article, giving a detailed response to the content of the document and the FUD rumors.

This document is the first quarterly report provided by Tether to NYAG after Tether and NYAG reached a settlement in 2021. Since the material contains a lot of information that was previously unknown to the public (such as holding some commercial papers of Bank of China, Customer relationship with Celsius Network), so shortly after the publication of this material, it caused an uproar in the market.

At around 8 o'clock tonight, Beijing time, Tether officially released a long article, giving a detailed response to the content of the document and the FUD rumors.

Following the settlement, CoinDesk requested that Tether submit materials related to its first quarterly report under the Freedom of Information Act (FOIL). Tether has previously opposed such disclosures to prevent the public dissemination of confidential data involving customers and sensitive proprietary information — information that could be exploited by malicious actors. After outcry, Tether dropped its objection, allowing CoinDesk and other media access to the documents as evidence of its commitment to transparency and openness, rather than further futile defense of various lawsuits.

Tether statement

Since Tether's settlement with the New York State Attorney General's Office, we have fulfilled our quarterly reporting obligations. Tether remains committed to transparency and puts the privacy and security of its customers first.

Tether remains committed to maintaining the highest standards, which is reflected in our ongoing diligence in developing risk indicators and risk measurement processes. These robust mechanisms allow our investment and finance teams to thoroughly assess the risks associated with any financial interaction of a company. Tether has a firm understanding of the lending business and the regulatory environment and proactively strives to achieve and sustain its business objectives while adhering to its unshakable risk management culture.

Tether’s transparency about the lending program was clear in its recent confirmation. We have always maintained our commitment to openness, and there is nothing new to reveal. Tether has never, and will never, risk compromising the integrity of its reserves. This is evidenced not only by its consistent and unhesitating fulfillment of redemption obligations, but also by its utmost transparency with regard to reserves.

These statements show that Tether has been applying the best asset management methods: short-term investment plus diversification, which is clearly visible from the investment list listed in various bank statements.

If the published information is read and understood correctly, the public will see that Tether has demonstrated the legitimacy of its business and the adequacy of reserves. However, like a lot of things that have happened to Tether and the crypto industry in general before, information has always been intentionally isolated or distorted in order to attract more traffic.

Tether is proud to be a leading stablecoin and a force in the community, and Tether is also proud of the liquidity, stability and health of its own reserves, which have withstood many hacks that have hit the encryption industry and even the traditional financial industry. The test of the swan event. Tether will always protect its customers, its employees and the community from attacks.

As this information becomes public, Tether wishes to provide a factual reference as to what this material does and does not contain.

Included in the disclosed documents is Tether’s statement about the bank, showing the full existence of its banking relationships and reserves. This is as we have mentioned in our public disclosures and as evidenced by audits provided by independent third-party agencies.
These statements show that Tether has been applying the best asset management methods: short-term investment plus diversification, which is clearly visible from the investment list listed in various bank statements.
Since previous data from the media only provided limited old data (2 years have passed), these materials do not represent the current state of Tether. Tether has taken various steps, including reducing its commercial paper holdings to zero by mid-2022 and significantly reducing its secured loan portfolio, which it plans to reduce to zero in the coming months.

Tether is the first company to disclose the composition of its reserves and will provide quarterly certificates of reserves completed by independent accounting agencies. Tether’s proof of reserves evolves over time, providing greater transparency relative to proofs previously provided to the New York Attorney’s Office. In fact, Tether’s latest proof of reserves showed a record net profit of $1.48 billion, bringing Tether’s reserve surplus to a record $2.44 billion and reducing bank cash deposits by more than 90%.

Tether is committed to continuing to be the transparency leader in the crypto industry, and we show we take this commitment seriously by providing information to the community and stakeholders, and demonstrating full support.

In the end, Bloomberg, CoinDesk, or any other media outlet chooses to publish this information either because the decision was made too hastily, or because the current events (the facts) did not pay enough attention. We do not endorse this type of behavior, but our priority is our customers and our continued support of the greater cryptocurrency community.

Tether Q&A

Tether first filed these lawsuits to prevent the public from disseminating confidential customer data and to prevent sensitive business information from being exploited by malicious actors. However, our ongoing and demonstrable commitment to transparency means that we must prioritize disclosure rather than getting further bogged down in time-consuming and unhelpful U.S. litigation that distracts the community from addressing real issues.

Earlier this year, Tether completed its reporting obligations to the New York State Attorney General's Office as part of the 2021 settlement. The settlement requires quarterly reporting on Tether's reserves for two years. Tether fully complied with this obligation, and there is no indication that disclosures were incomplete or reserves were insufficient. We are pleased to have completed our obligations under the Settlement Agreement. Today, Tether is stronger than ever, with a market capitalization at an all-time high.

Soon after the 2021 settlement was reached, CoinDesk and other parties requested release of material related to the first Tether quarterly report under New York's Freedom of Information Act. On June 15, 2023, the New York State Attorney General's Office provided corresponding documents to CoinDesk and others. They are providing these documents because Tether has decided to drop its claim against FOIL.

Q2: Why didn't Tether/Bitfinex complete the appeal?

Q3：At this point in the proceedings, Tether must decide whether to complete the appeal. The information disclosed today is not the same in sensitivity as it was two years ago, at least when it comes to Tether’s reserves. At this stage, we need to prioritize disclosure over further time-consuming and unhelpful U.S. litigation that distracts us from the real issues facing our community.

At this point in the proceedings, Tether must decide whether to complete the appeal. The information disclosed today is not the same in sensitivity as it was two years ago, at least when it comes to Tether’s reserves. At this stage, we need to prioritize disclosure over further time-consuming and unhelpful U.S. litigation that distracts us from the real issues facing our community.

Q4: Does Tether/Bitfinex agree to disclose customer information to the news media?

Absolutely not. The reason Bitfinex and Tether objected to CoinDesk’s disclosure under FOIL was that we wanted to prevent customer data from being made public. We call on CoinDesk and others not to publicly share past or current customer names and not put anyone in the community at physical or digital risk.

Q5: Are you forced to do this?

totally not. Tether first filed these lawsuits to prevent the public release of confidential customer data to prevent sensitive business information from being exploited by malicious actors. We continue to call on CoinDesk and others not to publicly share past or current customer names and not to put anyone in the community at physical or digital risk. We could have continued to appeal, however, our ongoing and demonstrable commitment to transparency means we must prioritize disclosure over further time-consuming and unproductive U.S. litigation that distracts the community from addressing real issues.

That's wrong. Tether has always refuted rumors about its investment in Evergrande. Again, this is simply false, and these disclosures prove it.

That's wrong. Tether has always refuted rumors about its investment in Evergrande. Again, this is simply false, and these disclosures prove it.

Q7: Okay, but why do you have so much exposure to Chinese commercial paper?

Tether's exposure to Chinese commercial paper is mainly in the banking industry, but all Chinese papers have good liquidity and are issued by well-known issuers in the international commercial paper market. All of these notes have stable issuers, and many are held in conservative portfolios by the world's largest investment managers. These BOC-related commercial papers are rated A1 or higher.

Also, it’s worth noting that Tether reduced its commercial paper holdings to zero last year. Tether has not lost a penny on any commercial paper, including Chinese commercial paper.

Q8: What role does Bitfinex play in the reserve adequacy ratio?

Bitfinex was a borrower on an interest-bearing loan from Tether, which was prepaid in full in 2019. This lending facility is now closed and will not be reopened. As a regular user, Bitfinex is also Tether's favorite option for buying Bitcoin.

Q9: Are collateral wallets controlled by Tether? Who are the clients providing these collaterals? How is the collateral valued?

Collateral wallets are fully controlled by Tether. Collaterals are valued at market prices, and an effective margin call system has been implemented. Tether has previously disclosed lending transactions with some large Tether customers in independent, third-party assurance statements. These borrowings are all over-collateralized, and Tether has never lost a dime on these borrowings, unlike some people in the traditional financial industry and elsewhere in the community who engage in "short lending". Tether stands for financial freedom and does not disclose the names of its customers to protect their privacy. We urge anyone who receives such information not to disclose wallet addresses, names and other identifiable information that may compromise the safety, security and privacy interests of third parties.

Q10: Are there indeed several customers whose personal and business accounts were closed? Should these accounts ever be public?

We regret that these names may be made public by the media, as Tether believes that the privacy of customers should be protected. It’s worth noting that, if made public, this information would not be made public by Tether, but by the New York State Attorney General’s Office and the media. We do not wish to comment on any individual relationship, but each client has passed the rigorous compliance checks and ongoing monitoring required by Tether's compliance policy.

Q11: Ok, if you guys are so transparent, can you share the file with us?

Can't. We have dropped requests to block CoinDesk and other media outlets because disclosure outweighed continued litigation. However, this does not mean that we are actively releasing this information. We continue to believe that information in these disclosures may be used to disclose the identity of customers, both current and future customers. In addition, our Compliance Policy may be used to circumvent our controls and violate our Terms of Service.

We will not put our clients at risk, nor will we disclose this information to avoid any legal claims.