Tether Gets (Another) New Bank

Colin Muller

The avalanche of recent news on the Tether (USDT) stablecoin continues today, as the opaque cryptocurrency company has reportedly secured its latest banking relationship with the Nassau-based Deltec Bank.

Unnamed sources speaking to TheBlock said that the relationship was formed only in the last few weeks.

Deltec Bank & Trust Limited provides various financial services, and a Bloomberg article last year stated that the former chief investment officer Atul Lele managed $5 billion for Deltec.

This new banking relationship comes shortly after Tether’s previous arrangement, with Noble Bank of Puerto Rico, was reportedly ended under unknown circumstances. Bloomberg reported that “while Noble faced an audit from Puerto Rico’s main bank regulator last year that raised concerns [...] it hasn’t been faulted publicly”.

Dramatic Times for Tether

Concerns over Tether, along with its sister company and cryptoasset exchange Bitfinex, are suspected to have caused dramatic price movements in the preceding days, especially for cryptoassets trading against Tether, which traded at historic premiums.

Tether and Bitfinex are registered in the British Virgin Islands, and share management and investors. The companies together have a chequered history, largely because Tether has never allowed a legal audit which confirms the existence of U.S. dollars equivalent to printed Tether tokens.

Both companies were previously served by Wells Fargo & Co bank, and both were subpoenaed by the Commodities and Futures Trading Commission, which agency plays a cardinal role in the regulation of cryptoassets in the U.S.

Tether is also finally facing serious competition in the stablecoin space, as a rash of listings of new stablecoins have come in the last couple of days, on the OKEx and Huobi exchanges. Paxos, True USD, Gemini Dollar, and Circle’s USDC will provide more options to the cryptoasset industry for quickly moving dollars.