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Tether responds to USDT FUD in full.

Read this article in 18 Minutes

Eleven questions, eleven answers.

Original Title: "Everything You Need To Know About What We Shared With NYAG"

Original Author: Tether, USDT Issuer

Translated by: Odaily Planet Daily

On June 16th, the New York Attorney General's Office (NYAG) released a document about Tether to the media.

This file is the first quarter report related materials provided by Tether to NYAG after reaching a settlement in 2021. Due to the fact that this material contains a lot of information that was previously unknown to the public (such as holding some commercial bills of Chinese banks and having customer relationships with Celsius Network), it caused a huge stir in the market shortly after its release.

At around 8pm Beijing time tonight, Tether officially released a lengthy article in response to all FUD rumors.

Here is the full text content, compiled by Odaily Star Daily.

Tether Statement

Since reaching a settlement with the New York Attorney General's Office, Tether has fulfilled its quarterly reporting obligations. Tether remains committed to transparency and prioritizes the privacy and security of its customers.

After the settlement, CoinDesk requested Tether to disclose the materials related to its first quarter report under the Freedom of Information Law (FOIL). Tether had previously opposed such disclosure to prevent the public from spreading confidential customer data and sensitive proprietary information, which could be exploited by malicious actors. After strong protests, Tether gave up its opposition and allowed CoinDesk and other media to access these documents to demonstrate its commitment to transparency and openness, rather than further defending against various lawsuits.

Compared to two years ago, Tether's market position has undergone a complete change. In the biggest black swan events of 2020 and 2022, Tether has proven its market leadership and demonstrated that its reserves have high-quality liquidity that can be used to support redemptions of any size. For example, in 2022, Tether processed $7 billion in redemptions within 48 hours, which was almost 10% of its reserves at the time. This is a great example of Tether showcasing its strength under pressure testing.

Tether's recent confirmation statement clearly outlines its loan plan with transparency. We have always been committed to transparency and there is no new information to disclose. Tether has never and will never risk compromising the integrity of its reserves. This has been demonstrated not only through its consistent and unwavering redemption obligations, but also through its maximum transparency regarding its reserves.

Tether has always been committed to maintaining the highest standards, which is reflected in our diligent development of risk indicators and risk measurement processes. These robust mechanisms enable our investment and finance teams to thoroughly evaluate any financial risks associated with company interactions. Tether has a firm understanding of the lending business and regulatory environment, and actively strives to achieve and maintain its business goals while adhering to its unwavering risk management culture.

In addition, our commercial bills always maintain an A2 or higher rating. All of our past statements have not been modified in any way. We are firmly committed to pursuing accountability and maintaining the highest standards.

If the information is read and understood correctly, it will only prove the legitimacy of Tether's business and its sufficient reserves to the public. However, as with many things that have happened in Tether and the entire cryptocurrency industry before, information is always deliberately isolated or distorted to attract clicks.

Tether is proud to be a leading stablecoin and a force within the community. Tether is also proud of its deep liquidity, strength, and stability of its reserves, which have withstood many black swan events that have caused significant damage to the cryptocurrency industry and even traditional financial industries. Tether will always protect its customers, employees, and community from attacks.

With the disclosure of this information, Tether hopes to provide a factual reference regarding the inclusion and exclusion of materials in the package.

· The disclosed documents include Tether's statement about banks, showing the full existence of its banking relationships and reserves. This is as mentioned in our public disclosures and as proven by audits provided by independent third-party organizations.

· These statements show that Tether has always applied the best asset management methods: short-term and diversified investments, as evidenced by the investment lists listed in various bank statements.

· Due to the limited availability of old data provided by the media (which is already 2 years old), these materials do not represent the current status of Tether. Tether has taken various measures, including reducing its commercial paper holdings to zero in mid-2022 and significantly reducing its collateralized loan portfolio, with plans to reduce it to zero in the coming months.

Tether is the first company to disclose the composition of its reserves and will provide quarterly reserve attestations completed by independent accounting firms. Tether's reserve attestations have evolved over time and provide more transparency than previous attestations provided to the New York Attorney General's office. In fact, Tether's latest reserve attestation shows a record-breaking net profit of $1.48 billion, bringing Tether's reserve surplus to a record high of $2.44 billion and reducing deposits by over 90%.

The reserve proof still shows that Tether is committed to reducing its secured loans to zero, which has now decreased from 8.7% to 6.5%. Tether's holdings of US Treasury bonds have also reached a record high of $53 billion, accounting for over 64% of its total reserves.

Tether is committed to continuing to be a transparency leader in the cryptocurrency industry. We demonstrate our commitment by providing information to the community and stakeholders, and showing full support for this promise.

In addition, Tether regularly collaborates with law enforcement agencies and has been involved in over 150 investigations across four continents. In just the past 18 months, Tether has compliantly recovered approximately $200 million worth of stablecoins based on regulatory and law enforcement requests and returned them to their rightful owners.

Finally, the decision of Bloomberg, CoinDesk, or any other media organization to provide this information to readers may be hasty and insufficiently focused on current events or facts. We do not endorse this behavior, but our priority is our clients and our continued support for the larger cryptocurrency community.

Tether Q&A

Q1: What happened on June 15th, 2023?

Earlier this year, Tether fulfilled its reporting obligations to the New York State Attorney General's Office as part of the 2021 settlement agreement. The settlement agreement requires quarterly reporting of Tether's reserves for a period of two years. Tether has fully complied with this obligation and there is no indication that the disclosed information is incomplete or that the reserves are insufficient. We are pleased to have fulfilled our obligations under the settlement agreement. Today, Tether is stronger than ever before and its market capitalization has reached a historic high.

Shortly after the settlement agreement was reached in 2021, CoinDesk and others requested materials related to the first Tether quarterly report under the New York Freedom of Information Law. On June 15, 2023, the New York Attorney General's Office provided the corresponding documents to CoinDesk and others. They provided these documents because Tether decided to abandon its opposition to the FOIL request.

Q2: Why haven't Tether/Bitfinex perfected their appeal?

Tether first raised these lawsuits to prevent the public from spreading confidential customer data and to prevent sensitive business information from being exploited by malicious actors. However, our ongoing and verifiable transparency commitments mean that we must prioritize openness rather than further engaging in time-consuming and unproductive US litigation, which would divert attention from addressing real issues in the community.

Regarding the litigation process, Tether must decide whether to perfect the appeal. The sensitivity of the information disclosed today is different from two years ago, at least in terms of Tether's reserves. At this stage, we need to prioritize transparency rather than further time-consuming and unhelpful US litigation, which would divert our attention from the actual issues facing the community.

Q4: Does Tether/Bitfinex endorse the disclosure of customer information to the media?

Definitely not. Bitfinex and Tether oppose the disclosure requested by CoinDesk under FOIL because we want to prevent customer data from being made public. We urge CoinDesk and others not to publicly share the names of past or present customers, and not to expose anyone in the community to physical or digital risks.

Q5: Are you forced to do this?

Not at all. Tether's initial filing of these lawsuits was to prevent the public release of confidential customer data, in order to prevent sensitive business information from being exploited by malicious actors. We continue to urge CoinDesk and others not to publicly share the names of past or present customers, and not to expose anyone in the community to actual or digital risks. We could have continued to appeal, but our ongoing and demonstrable commitment to transparency means that we must prioritize openness over further time and non-productive US litigation that would distract from addressing real issues in the community.

Q6: Did Tether ever state that it had no exposure to Chinese commercial paper?

That's incorrect. Tether has always been refuting rumors about its investment in Evergrande. Once again, it is completely false and these disclosures prove it.

Q7: Okay, but why do you have so much exposure to Chinese commercial paper risk?

The risk exposure of Tether to Chinese commercial bills mainly lies in the banking industry, but all Chinese bills have good liquidity and are issued by well-known issuers in the international commercial bill market. All of these bills' issuers are stable, and many bills are held in conservative investment portfolios by the world's largest investment managers. The commercial bills related to Chinese banks are rated A1 or higher.

In addition, it is worth noting that Tether reduced its commercial paper holdings to zero last year. Tether did not lose a penny on any commercial paper, including Chinese commercial paper.

Q8: What role does Bitfinex play in terms of reserve adequacy?

Bitfinex is a borrower of interest-bearing loans from Tether, which was fully repaid ahead of schedule in 2019. The loan mechanism has now been closed and will not be reopened. As an ordinary user, Bitfinex is also a favorite choice for purchasing Bitcoin with Tether.

Q9: Is the collateral wallet controlled by Tether? Who are the customers providing these collateral assets? How is the valuation of the collateral assets determined?

The collateral wallet is fully controlled by Tether. The collateral is valued at market prices and an effective margin call system is implemented. Tether previously publicly disclosed its lending transactions with some large Tether clients in an independent third-party attestation. These loans are all over-collateralized, and Tether has never lost a penny in these loans, which is different from some people in the traditional financial industry and other communities who engage in "short-term loans". Tether represents financial freedom and does not disclose the names of its clients to protect their privacy. We urge anyone who receives this information not to disclose wallet addresses, names, and other identifiable information that may harm the security, security, and privacy interests of third parties.

Q1 0: Were there indeed several customers whose personal and corporate accounts were closed? Should these accounts have been made public?

We may regret that these names may be made public by the media, as Tether believes in protecting the privacy of its clients. It is worth noting that if made public, this information will not be disclosed by Tether, but by the New York State Attorney General's Office and the media. We do not wish to comment on any individual relationships, but each client has undergone strict compliance checks and ongoing monitoring required by Tether's compliance policies.

Q1 1: Okay, if you are so transparent, can you share the files with us?

Not allowed. In order to prioritize transparency over time-consuming and unproductive US litigation, we have given up on blocking requests from CoinDesk and other media outlets. However, this does not mean that we will proactively release this information. We still believe that the information in these disclosures could be used to publicly identify clients, including existing and future clients. Additionally, our compliance policies could be used to circumvent our controls and undermine our terms of service.

We will not put our customers in danger, nor will we disclose this information to avoid any legal claims.