Yes that's one way to make money. They also make currently 4.75% on $67B of issued Tether = $3B+ per year just by buying US Treasuries.
Even if they were undercapitalized in the past my guess is they are fine now
Even if they were undercapitalized in the past my guess is they are fine now
While the treasury market is large the players are small and no one claims to work with tether.
You can’t roll billions in treasuries without all the major players knowing who you are.
And if they did they would release their cusips and put this to bed as there is only downside for them by withholding the cusips
Attestation reports from BDO Italia state that they hold US Treasuries and that this makes up the core of their holdings.
https://tether.to/en/transparency/#reports
> While the treasury market is large the players are small and no one claims to work with tether.
Even firms like Cumberland who are known to participate in the Tether creation/redemption process do not talk about working with Tether
https://protos.com/tether-minted-usdt-stablecoin-crypto-two-...
For the US Treasury market, the players are not small. Maybe that was believable for the commercial paper dealings for Tether, but you can just directly buy from the US Treasury at auction, or go through a banking partner like Deltec Bank, and none of "the players" will know anything about you.
> You can’t roll billions in treasuries without all the major players knowing who you are.
Of course you can. Direct and indirect bidders for US Treasury bills are routinely in the dozens of billions. No need to go through a primary dealer.
> And if they did they would release their cusips and put this to bed as there is only downside for them by withholding the cusips
Would you honestly be convinced if their attestation reports included CUSIPs? Do you think that people would still clamor for an audit and just move the goalposts to "anyone can look up CUSIPs for US Treasuries. Why aren't the primary dealers confirming their purchases?"
Yes because that would be verifiable and we could know the counterparty holding them and ask for verification. If they verified they are holding those cusips for Tether then we're good.
And I don't' think you understand the treasury market as well as you think you do. Its a very transparent market. Everyone knows all the players, especially at the 10's of billions size.
If they honestly were buying treasuries through Deltec then we would know, I assure they they are not as Deltec doesn't really participate in this market
> Billions Of Tether’s Reserves Were Stored At Cantor Fitzgerald, Capital Union And Ansbacher
So, the big player in the Treasury market, Cantor Fitzgerald, knows about Tether and their holdings.
What do you mean by that? What do they do with the tether they issue then?
Which would explain why nobody in the financial industry knows them even if they supposedly manage 60B$.
They’re your own IOUs [1]. Imagine if SBF had Tether.
[1] https://ag.ny.gov/press-release/2021/attorney-general-james-...
https://tether.to/en/tether-banking-relationship-announced/
From https://www.deltecbank.com/2022/09/01/the-history-of-stablec...
> Tether
> Launched in 2014, Tether (USDT) came to extraordinary success with a current market capitalization exceeding 67 billion USD.
> This stablecoin fixes the issues inherent in the previous three. It relies not upon volatile reserves or the idea of persistent arbitrage trading, but on hard reserves of fiat currency. For every Tether coin in existence, there is one US dollar in a vault backing its existence.
> In this way, the stablecoin handles a complete theoretical rout with ease. Tether continues to serve the burgeoning digital asset space while garnering the implicit affection of regulators.
Interesting relationships with FTX - apparently SBF gave them a $50 million loan to keep operating, and they’re neck deep in that mess.
https://www.forbes.com/sites/davidjeans/2023/01/15/ftx-delte...
Might want to give them a year or two before figuring that isn’t another smokescreen.
Deltec's response is that they're awaiting instructions on how to repay the loan:
https://www.deltecbank.com/2023/01/16/deltec-bank-trust-limi...
Aka it stinks.
Of course, someone somewhere in the future will be left holding the bag. But if they can keep it going, and if they do manage to sell some USDT for real money (which they certainly did), then they can still make a load of profit.