Stablecoin-issuer Tether has published a lengthy response to reports that the reserves of Tether (USDT), one of the largest stablecoins, once included securities issued by Chinese companies.
On June 16, mainstream media outlets like Bloomberg cast doubts on USDT by highlighting that the company once used held securities issued by Chinese state-owned firms. Bloomberg cited documents released by New York’s Attorney General (NYAG) and highlighted that USDT was once backed by securities from firms like the Industrial & Commercial Bank of China, China Construction Bank Corp. and Agricultural Bank of China.
Everything You Need To Know About What We Shared With NYAG
— Tether (@Tether_to) June 16, 2023
On the same day, the USDT issuer responded to the reports saying that they were done without giving much attention. Tether wrote:
“Ultimately Bloomberg, CoinDesk or any other media outlet’s decision to present this information to its readers was likely done in haste with little attention to current events or facts.”
According to Tether, they “do not condone this behavior” and highlighted that their priorities lie with their customers. The stablecoin issuer also noted that the materials obtained by the media outlets do not represent what the company is at the present day. Tether said that the data sent to the media platforms were limited and are more than two years old.
In addition, Tether also clarified that its exposure to Chinese commercial papers was liquid and all of the issuers were stable. The company also highlighted that the papers were also being used by some of the world’s biggest investment managers. “The Chinese banking-related commercial paper at issue was rated A1 or better,” they added.
The stablecoin issuer also noted that its exposure to commercial paper holdings was reduced to zero last year. According to Tether, they did not lose any money on any commercial paper. This includes commercial papers issued by Chinese firms.