More Evidence Points to Tether's (USDT) Dollar Backing

A new Bloomberg report suggest that Tether Ltd may really have $1 for every USDT in circulation.

Published a few hours ago (Dec 18th) the report indicates that Bloomberg has documents in their possession that “offer more detail than has ever been made public”.

The documents were not shared and do not provide a complete overview of Tether’s finances. However, bank statements from four separate months reveal the amount of dollars held in Tether Ltd.’s accounts.

One statement demonstrates that on January 31, Tether held $2.2 billion in a bank account at Puerto Rico’s Noble Bank. This was exactly the same amount (2.2 billion) of USDT in circulation on that same day. The numbers also match up in both September and October of last year.

The bank statements however, do not show where the funds originated from nor their present location, as Tether Ltd. has worked with several different banks in its three-year history.

Bloomberg did not disclose who provided the documents but writes that it was someone with access to the company’s records. Bloomberg also affirms that the veracity of the documents was confirmed by a government official.

The Origins of the Tether Suspicions

Back in January, the U.S. Commodity Futures Trading Commission (CFTC) issued subpoenas to Tether Ltd. and Bitfinex, in order to determine if the companies claimed to have the necessary money to back the USDT’s in circulation. The investigation hasn’t yet produced any results and its status is as of the time of writing undetermined.

Following the subpoenas, many conspiracy theories started emerging, claiming that Tether might not have the funds it claims, and that USDT was involved in manipulating the price of bitcoin. The U.S. Justice Department is currently investigating whether the last bitcoin bull run to $20,000 was a consequence of unethical Tether trades.

Despite all the negative claims, having lost its peg by a considerable amount more than once, and the competition from several stable coins that have entered the market this year, Tether has remained somewhat resilient. In fact, just yesterday Tether briefly surpassed Stellar (XLM) as the 4th largest cryptocurrency.

Tether Has Backlisted a Total of 39 Ethereum Addresses Holding USDt

Ther, the issuer of the leading stablecoin USDt, has already blacklisted 39 Ethereum addresses holding the stablecoin since November 2017.

According to Philippe Castonguay, an Ethereum researcher at Horizon Games, 24 of the 39 addresses identified were blacklisted this year. Castonguay created a dashboard on Dune Analytics that shows the addresses that Tether blacklisted.

When an address is blacklisted it can no longer send, receive, or redeem USDt tokens, which essentially means the tokens held in the address become unusable. The addresses that Tether blacklisted over time have millions worth of USDt in them combined, with the latest one having nearly $1 million worth of tokens in it.

The address, according to Etherscan data, received a938,965 USDt tokens from Binance 26 days ago, before it was blacklisted by Tether. The owner of the address appears to have tried to move the funds the next day, but the transaction was reverted.

Most of the blacklisted addresses appear to have less than $100 worth of USDt tokens in them, while the address with the largest amount appears to be 0x5c27cc68fe01a3994807b60a6c81d8ba638b4ba1 with a total of 4.56 million UISDt in it. Notably, the address also has 330,000 BUSD tokens in it, and 13,500 ETH.

While it isn’t clear who owns the address, the funds it received appear to have come from an address that originally got the cryptocurrency holdings by withdrawing funds from Binance. Most addresses Tether likely blacklisted most address in the list -if not all – responding to requests from law enforcement.

As CryptoGlobe reported, the CENTRE Consortium recently backlisted its first USDC address on the Ethereum network, responding to a request from authorities. On its website, Circle notes an address may be blacklisted when there is a potential security breach or a threat to the network itself, or to “comply with a law, regulation or legal order from a duly recognized U.S. authorized authority, U.S. court of competent jurisdiction or other governmental authority with jurisdiction over CENTRE.”

Featured image via Pixabay.