Tether reports $700 million in profit, excess reserves of $960 million

abdelaziz Fathi

World’s largest stablecoin issuer, Tether said it earned more than $700 million in the October-December quarter, which was added to the reserve backing its stablecoin (USDT).

Tether

Tether, which is owned by Hong Kong-headquarter Ifinex, also revealed a breakdown of its reserves for December 2022, as well as a complete list of USDT reserve custodians. The breakdown, dated as of December 31, 2022, shows that Tether held 100% of its $67 billion reserves in consolidated total assets alongside excess reserves of at least $960 million.

Tether’s reserves remain “extremely liquid,” the company says, with the majority of its investments being held in cash, cash equivalents, and other short-term deposits.

Meanwhile, Tether moved $39 billion of its reserves to Cantor Fitzgerald, making the Wall Street bond trading house the custodian of its largest pool of reserves, based on its circulating supply. Details of how Tether managed those assets haven’t been widely known.

Tether has switched the accounting firm that audits the massive reserves that back its USDT token to BDO Italia, the 5th largest accounting firm in the world. It officially began working with BDO Italia in July 2022 for its quarterly attestations. With this alignment, the issuer moved towards the release of its attestations from a quarterly basis to monthly reports.

Onboarding a major accounting firm, which can be held accountable by third parties for financial information, to engage in an audit of a crypto token was also a notable success for Tether’s initiative. The developing nature of the cryptocurrency industry, combined with the lack of regulatory oversight, makes the potential risk associated with a comprehensive audit of USDT or any other crypto asset too high for accountancy firms.

Tether seeks to reassure investors that its cryptocurrency is backed by U.S. dollars after the major stablecoin has been dogged by speculation that it holds insufficient capital to support its market cap of USDT.

As the company continues to face questions about what its USDT token is actually backed by, Tether has been reducing the amount of corporate debts in its reserves.

Paolo Ardoino, CTO of Tether, comments: “After a tumultuous end to 2022, Tether has once again proven its stability, its resilience and its ability to handle bear markets and black swan events, setting itself apart from the bad actors of the industry. Not only were we able to smoothly execute over $21 billion dollars in redemptions during the chaotic events of the year, but Tether has on the other side issued over $10 billion of USD₮, an indication of continued organic growth and adoption of Tether. Last quarter, Tether generated over $700 million in profits, adding to its reserves. We are proud of how Tether has continued to be a driving force in rebuilding trust within the crypto industry and we are determined to continue to set a positive example for our peers and competitors alike.”

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