Documents released by the New York Attorney General’s office reveal that the world’s largest stablecoin, USDT, once counted securities issued by Chinese-centered companies among its reserves.
USDT Reserves!
According to reports released by New York prosecutors, Tether Holdings Ltd. listed securities issued by China’s state-owned Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China as part of the reserves supporting its USDT stablecoin. Additionally, Tether held securities issued by companies such as Deutsche Bank, Barclays, and ArcelorMittal SA.
Rumors have been circulating for a while that Tether was backing its stablecoin with Chinese securities. While Tether remained silent on the matter, it denied holding commercial papers issued by the troubled Chinese real estate giant Evergrande in September 2021. In July, Tether stated that it did not have any Chinese commercial papers at that time and refused to admit whether it had in the past. The company also stated:
We condemn the adversaries who continue to spread lies about our commercial paper assets. We should also point out that we were wrong…
18.5 Million Dollar Penalty!
The documents were released due to a request for information. They also continue to be part of the data collected by NYAG in the Tether investigation, which concluded in 2021 with a settlement and an $18.5 million fine. The company claims that since then, Tether has removed all trade documents from the support of USDT.
On the other hand, the market uncertainty following the lawsuit filed by the United States Securities and Exchange Commission (SEC) against Binance and Coinbase, the leading cryptocurrency exchanges by volume, caused a significant decline in tokens. Bitcoin (BTC) fell to the $26,000 range, further declining to $25,000 levels after an announcement made just minutes ago. According to the statements made, a new investigation was launched against Binance, which is still in lawsuit discussions with the SEC, from France. The new lawsuit cites a failure to fulfill anti-money laundering obligations as the reason.
