Tether Confirms Its New Banking Partner Is Deltec Bank, Provides Proof of Funds

Siamak Masnavi

On Thursday (1 November 2018), Tether announced that it had set up a banking relationship with Deltec Bank & Trust, which is based in The Bahamas.

This is how Tether announced the news on Twitter:

Over on its website, Tether gave an explanation for their silence over the past few several weeks about their banking arrangements. Deltec had only accepted Tether after performing extensive due diligence:

"This included, notably an analysis of our compliance processes, policies and procedures; a full background check of the shareholders, ultimate beneficiaries and officers of our company; and assessments of our ability to maintain the USD-peg at any moment and our treasury management policies. This process of due diligence, was conducted over a period of several months and garnered positive results, which led to the opening of our bank account with this institution."

To reassure holds of its stablecoin (USDT), Tether stated that:

  • Deltec would be reviewing them on a regular basis.
  • It is "registered with the Financial Crimes Enforcement Network of the US Department of the Treasury and maintains the highest standards of AML/CFT procedures."
  • USDT is fully collateralized with USD deposits at its bank(s).

However, to really hammer home the point that it was solvent (unlike what some people were saying on Twitter and on other social median platforms), it provided a letter dated 1 November 2018 from its new bank that seems to confirm that Tether does indeed have a balance in its USD account of $1,831,322,828, which exceeds the amount of tethers currently in circulation:

Deltec Letter.png

Although this letter will by no means satisfy Tether's harshest critics (such as Twitter account "Bitfinex'ed") since it does not qualify as any kind of audit, there is no name of a bank official on the letter, there is no official stamp, and there is only the mention of the USD balance as of close of business on 31 October 2018 with no accompanying statement showing when the account was opened and what activities have taken place since that date.

Twitter user "Bitfinex'ed", who is probably the most vocal critic of both Tether and Bitfinex, had this to say about today's announcement:

However, with regard to full audits of fiat-backed stablecoins, we should recall the words of Cameron Winklevoss, co-founder and President of Gemini Trust, who said on 17 October 2018:

According to data from CryptoCompare, Tether (USDT) is currently trading at $0.9926, and the number of tethers in circulation is 1,776,421,736. 

Featured Image Courtesy of Tether

Token Listing Guidelines for Binance DEX

On Thursday (April 25), Binance unveiled guidelines for listing tokens on Binance DEX, its new decentralized exchange, and said that these guidelines would enable Binance DEX "to facilitate a larger number of crowd-vetted projects, hopefully listing 10x more tokens than currently listed on Binance.com."

Despite what some people think, issuing a token on Binance Chain does not mean that the new token will automatically get listed on Binance DEX. Binance, which has been criticized like most other centralized exchanges for having an opaque listing process, is hoping that the new "transparent and community-driven" listing process for Binance DEX will finally satisfy most if not all of its detractors.

The Binance DEX listing process consists of the following steps:

  • 1. Proposal
    • "It is recommended that Token Issuers first create a thread under the “Token Issuance & Listings” category in the Binance Chain Community Forum."
    • "It is recommended that this public thread contain full answers to the Binance DEX Token Listing Submission Criteria..."
    • "Token Issuers must initiate an on-chain Proposal Request (fee of 10 BNB) to list a trading pair for a token."
    • "Token Issuers must request BNB as the quote asset for their first trading pair. For example, ABC/BNB."
    • "Once the proposal request is submitted, Token Issuers must post the Proposal ID to their proposal thread in the forum as a ‘reply’."
  • 2. Deposit
    • "Once the proposal request is sent, Token Issuers will need to deposit at least 1,000 BNB within 2 days."
    • "Proposals that do not receive sufficient deposits within this timeframe will not be able to move on to the voting stage and their deposit will not be refunded."
    • "If the Vote passes in Step 3 (majority 'Yes'), the 1,000 BNB deposit will be refunded."
  • 3. Vote
    • "At least half of the voting power is required to vote 'Yes' for the proposal to be accepted."
    • "Binance Chain Validators can vote for either 'Yes', 'No', 'NoWithVeto', or 'Abstain' within the time period specified in the proposal request."
    • "The 1,000 BNB deposit will be refunded if the majority of Validators vote for 'Abstain'."
    • "Proposals are denied if one third of the Validators vote 'NoWithVeto' or if half of the Validators vote 'No'."
    • "Denied proposals will lose all the funds deposited, however this result will only occur in rare circumstances when there is relatively clear fraud, scam or spam."
  • 4. List
    • "If the vote is passed, the Token Issuer will need to initiate a 'List' transaction on-chain (2,000 BNB fee) within the timeframe specified in the proposal, while the previous 1,000 BNB deposit will be refunded back to the proposing user."
    • "The trading pairs will be live immediately after this request is completed."

Binance DEX Listing Process Workflow Screenshot.png

Binance says that the "listing application, project information, vote results and all community interaction will be public on the Binance Chain Community Forum," that the decisions of the Binance Chain Validators (who are the only ones with the power to vote) are "purely based on public information in the forum," and that there is no other way "for projects to contact Binance Chain Validators."

One interesting thing to point out is that although the Binance DEX listing fee has been set to 2,000 BNB (currently, according to CryptoCompare, worth around $45,580), originally Binance CEO Changpeng Zhao (aka "CZ") was thinking of making the listing fee on Binance DEX be around $100,000, as he mentioned in his first Ask Me Anything (AMA) session on February 7:

"There will be a listing fee on the DEX. I actually deliberately want to set that a little bit high, just so we reduce the number of spam or scam projects. And there’s also a voting process by the validators to be listed on the DEX. So there’s a fee, I think the fee will be probably close to $100K US, so we’ll see. But the fee is adjustable over time, it’s quite easy to change."

Earlier today, Mithril, the first crypto project to migrate its token (MITH) to Binance Chain, got listed on Binance DEX:


All Images Courtesy of Binance