According to Bloomberg News, Tether Holdings Ltd. at one point counted securities issued by Chinese companies among its USDT stablecoin reserves.
According to documents obtained by Bloomberg from the New York State Attorney General’s office.
In October 2021, a Bloomberg investigation revealed that Tether’s reserves contained billions of dollars in debt to Chinese companies.
At the time, Tether denied any exposure to troubled property developer Evergrande Group’s debt, according to Bloomberg, but did not say whether it held securities in other Chinese companies or other issuers.
USDT is the largest stablecoin by market cap, according to CoinMarketCap, and has been questioned by regulators about what exactly is backing it.
New York Attorney General Letitia James accused Tether of not providing full support at all times after reaching a settlement with the company in February 2021.
“Tether’s claims that its virtual currency was fully backed by the US dollar were a lie at all times. These companies obscured the real risks facing investors, and those operating in the darkest corners of the financial system.” were being run by unauthorized and unregulated persons and entities.” James said in 2021.
Tether responded to the news about its reserves backed by Chinese securities in a blog post on Friday.
“Tether is in a very different state than it was two years ago. It has proven to be leading the industry during the largest Black Swan events of 2020 and 2022, and its reserves are highly liquid, high quality, and ready to be available to support redemptions of any size, as shown,” the company said. In 2022, when Tether recovered $7 billion in 48 hours, roughly 10% of its reserves at that time.”