Tether, the issuer of stablecoin, released an attestation yesterday, March 31, about its reserves. Reserves are the amount of assets that back a particular coin. This attestation was released to address the issue of its reserves. Because people have been questioning Tether’s reluctance in the past to be transparent, especially regarding the backing of its coins. Yesterday, Tether revealed that its coins were backed by up to $35 billion in reserves. Despite Tether’s recent attestation, things still seem as knottier as before. This attestation by Tether yesterday, hasn’t exactly satisfied the skeptics’ questions. The attestation of yesterday was the first one in so many years.
In the document, it was shown that Tether had about $35.2 billion in liabilities and up to $35.3 billion in assets. The document also contained Tether’s own report and a statement from an accounting firm called Moore Cayman from the Cayman Islands. The statement from the accounting firm was dated February 28. According to the document, up to $35.1 billion of the liabilities were related to digital tokens issued. This means that the tokens were backing the Tethers in circulation at the time.
Is it just February 28?
This attestation released by Tether is a much necessary gesture required to show transparency on the part of the company since it has received a lot of scrutiny for its non-transparent ways in the past. Recently, the New York State Attorney General’s office just fined Tether the sum of $18.5 million for settlement agreement in the very long probing process they did into Tether’s operations.
From the attestation, it is shown that Tether had about $35.3 billion as of February 28. So, this supports the claim that Tether had $35 billion circulating at the time. But this attestation does not answer for previous days before February 28. So, what about the days before February 28. According to the New York AG’ office, it is very unclear how much money Tether had before that date. The AG’s office also declared that a former transparency update that Tether did in the past was very misleading.
What about Tether’s Future Dealings and Reports?
The attestation that Tether provided has failed to clear the air about the transparency questions completely. And also, because the attestation only examines one single date, there is no way to know what transpired before that date or presently. If Tether wanted to clear the air of the controversies completely, a complete audit is what they need rather than an attestation. A complete audit will definitely provide a very detailed and broader painting of Tether’s holdings and also provide information about the reserves over a long period rather than one single day or moment.
As a result of the probing and settlement that Tether had with New York’s AG, Tether is now required to provide regular quarterly reports on its holdings. There are certain items that must be provided in these reports. For example, Tether must publish the categories of the assets backing the coins and the percentages of each category stated. The attestation earlier published did not contain these. But the quarterly reports have been filed and mandated to contain them. These quarterly reports will likely show the public and other skeptics how exactly Tether’s money are being used and invested.