Tether to Invest Some Assets in Bitcoin

Stablecoin issuer's attorney David Miller said it at the Supreme Court of the State of New York
22 May 2019   543

According to court documents received by The Block, Tether invested part of Bitcoin and other assets, including cash and cash equivalents.

At the end of April, the New York Attorney General’s Office charged Bitfinex with the fact that, having suffered a loss of $ 850 million, it concealed this fact, using the funds of its affiliated company Stablecoin Tether to cover the damage.

Shortly before this, Tether quietly updated the USDT tokens security policy. According to the updated edition, the company’s stablecoins can be provided with reserves included "traditional currency and cash equivalents", as well as, “other assets and receivables from loans made by Tether to third parties.” Also, as reported, the statement used to read: “Every tether is always backed 1-to-1, by traditional currency held in our reserves.”

Prior to the April 24th order … Tether actually did invest in instruments beyond cash and cash equivalents, including bitcoin, they bought bitcoin.
 

David Miller

Attorney, Bitfinex

Also during the hearing, Miller complained that the Attorney General of New York restricts Tether in investment activities.

In turn, the New York Supreme Court Judge Joel M. Cohen questioned the logic of the company, finding a contradiction in investing stablecoins in high-volatile assets, like Bitcoin.

Tether sounded to me like sort of the calm in the storm of cryptocurrency trading. And so if Tether is backed by bitcoin, how is that consistent? If some of your assets are in a volatile currency that Tether is supposed to somehow modulate, that seems like it’s playing into what they are saying.
 

Joel M. Cohen

Judge, New York Supreme Court

He replied that only a small amount had been invested. Also, according to him, according to the updated Tether collateral policy, collateral is allowed not only in cash and cash equivalents, but also in other assets.

The New York State Supreme Court upheld injunction on the use of Tether Limited’s reserves for the investment activities of other companies, in particular the Bitfinex cryptocurrency exchange.

Also, Bitfinex cannot use Tether assets for lending or for other needs, if this is not required by normal business practices. In addition, Tether is forbidden to provide funds from its reserves to employees, unless it is a question of salaries and standard payments.

At the same time, the ruling states that Tether can invest its reserves in the ordinary course of business. The company had already stated at the previous court session that it had used its reserves for investment purposes, but it was not known what investments we were talking about.

Tether to Perform $300M Worth Chain Swap

300M USDt was moved from the Omni to the ERC-20 blockchain; now the share of stablecoins based on Ethereum exceeded the share of coins based on Omni
30 October 2019   373

Tether transferred 300 million USDT tokens from the Omni blockchain to the Ethereum standard ERC-20.

The tweet also says that the token migration was carried out with the participation of an unnamed third party. At the same time, the company assured that the aggregate supply of USDT will not increase as a result of the operation.

Almost together with the statement of the largest issuer of stablecoins, the Whale Alert Twitter account recorded the corresponding operations.

After that, the share of stablecoins based on Ethereum (44%) exceeded the share of coins based on Omni (39%):

USDT
USDT

To date, the proportion of TRC20 standard coins is 18%. Tether also released some “stable coins” based on EOS and in the Liquid sidechain.