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Bloomberg: We’ve seen Tether’s bank statements and they look good

Posted: 19 December 2018 5:01 pm
Cryptocurrency trading

The news is a ray of sunshine, but it doesn't necessarily put any new information out there.

Tether seems to have enough money, Bloomberg reported yesterday, claiming to have seen the bank statements that suggest as much. The statements reportedly spanned four separate months during which Tether had sufficient funds in Puerto Rico's Noble Bank to support all Tethers in circulation.

"For example, one statement shows $2.2 billion was in Tether’s account at Puerto Rico’s Noble Bank Ltd. on Jan. 31. That same day, 2.195 billion Tethers existed," it said.

More answers, more questions

The question of whether Tether is fully collateralised is an ongoing debate in cryptocurrency, finding itself central to many concerns around Tether-related price manipulation.

Bloomberg's assertions might be a step in the right direction. The bank statements were reportedly obtained by someone with access to the company's records, while their accuracy was verified by a government official.

But there are still remaining issues. "The bank statements reviewed by Bloomberg don’t show, for example, where the funds originated or where they are now," Bloomberg said.

Wherever the funds are now – in the Bahamas most likely – they're almost certainly not still at Noble Bank which has reportedly gone under the hammer after losing Tether and Bitfinex as clients.

It's also, in some respects, a repeat of what was already known; that there has, at certain points in time, been a lot of money in a bank, but not who it really belongs to, whether it's encumbered or if that money will still be around in the event of a Tether bank run.

For example, it's not enough to conclusively say that the money in the bank belongs to Tether rather than Bitfinex customers. The bank statements reportedly showed money flows between Tether and Bitfinex, as one would expect given that Tethers were redeemable primarily through Bitfinex at the time, but it's nothing like a comprehensive audit.

And it's still not clear why Tether is so staunchly unable to let an accounting firm have at it.

On the whole, the news from Bloomberg might be a positive tilt in the right direction, but it doesn't necessarily reveal anything that wasn't already known.

It might not necessarily help Tether too much in a commercial sense either, since the cryptocurrency is steadily losing market share to more transparent competitors.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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