Documents obtained by CoinDesk reveal that stablecoin issuer Tether held its funds at four banks, two asset management firms, two gold depository companies and a broker, as well

It also held funds in commercial papers and securities issued by different entities, such as the Qatar National Bank QPSC (QNB), Barclays Bank PLC (BPL), Deutsche Bank AG ( A large percentage of its issuers are Chinese financial institutions and banks.

Tether’s reliance on commercial papers in the past is not news. The company that issues and maintains by market capitalization the largest stablecoin in the world admitted to investing in commercial paper as early as 2021. The company’s dependence on commercial paper was unknown.

Tether’s token was backed by commercial paper and securities issued by the Agricultural Bank of China Ltd., Bank of China Hong Kong Ltd., Industrial and Commercial Bank of China Ltd., China Merchants


Note from the editor: This article was based on documents that were received through a Freedom of Information Law Request to New York’s Attorney General’s Office. CoinDesk will review the documents to make sure that no private information of individuals is accidentally shared. They may redact certain sections before they are released in their entirety.

Documents show that on March 31, 2021 Tether stated it held more than $35,5 billion in U.S. equivalents of dollars at these institutions. The New York Attorney General (NYAG), in response to an FOIL request made in June 2021, shared them with CoinDesk. These documents, which appear to be from Aug. 4, 20,21, provide a snapshot of Tether operations that day. The documents also detail an additional $5.1 billion under “USDT Lending” and other assets. This totals $40.6 billion in assets, which roughly matches the 40.8 billion USDT that were in circulation.

The documents provide a limited but rare window into Tether’s finances. Tether has been a topic of controversy in the crypto world for years. In February 2021 when Attorney General Letitia announced the settlement between her office and Tether, she stated that there were times in 2017 or 2018 where USDT, Tether’s stablecoin , was not The documents created six months after NYAG’s investigation settlement do not prove or disprove this claim.

The documents do add another piece to the puzzle about where Tether keeps the assets that back the token. Information about Tether’s banking relationship has been released in dribs over the years.

Tether (USDT), the largest stablecoin in the world, is a major asset that can be used as a counterparty for crypto transactions on many exchanges. Tether claims to have at least one dollar worth of assets on hand for each USDT token. It has been a long-standing concern that USDT is not fully backed. In April 2019, the New York State Attorney’s Office announced it had lent Tether $850 million of reserves to Bitfine Bitfinex was denied access to this amount when authorities seized its payment processor.

CoinDesk’s FOIL request requested documents detailing the USDT stabilitycoin’s back after Tether released its first document outlining what reserves were made up of. Nearly half of the reserves were in commercial paper.

Tether announced its settlement with NYAG in 2021 and stated that it would share the same information with NYAG about its reserves for a minimum of two years. ‘s first release in May 2021 consisted of a couple pie charts , a short statement, and a few pie charts .

The portfolio report, which is dated April 7, 2020, has similar pie charts, but contains more detailed information. It provides specific dollar amounts in U.S. dollars for Tether’s reserves. The information about fixed-term deposit amounts was redacted. However, it shows that Tether had millions of dollars in reserves held in bonds, certificates of deposits, and commercial paper.

In a letter dated 4 June 2021, Tether stated that it had funds at Ansbacher Limited in Bahamas (confirming Forbes’ report in February this year), Capital Union Bank, Bahamas The vast majority of Tether’s assets, more than $26 Billion as of March 2021, were held by Deltec Bank and Trust in the Bahamas. The Deltec relationship was made public in November 2018 when Tether published a letter with the bank’s letterhead. It bore a signature but no employee name. Deltec’s Chairman confirmed later to CoinDesk that the document was genuine.

According to CoinGecko there was $40.8 billion USDT worth in circulation at 10:30 p.m. ET on March 31, 2021. ET on March 31st, 2021.

The document also details the assets that each institution holds, and confirms that Tether held a large amount of its reserves as commercial paper.

Ansbacher’s Portfolio Report further delves into these details. It shows that almost 85% of Tether’s holdings were commercial papers. Tether’s remaining holdings were dominated by corporate bonds, which accounted for 13.7%. The remainder was made up of high yield bonds, floating-rate notes and credit accounts.

The document has not been signed.

Capital Union Bank also provided a report that stated nearly 88% Tether’s holdings are “liquid assets,” but did not give a breakdown.

These documents describe the communications between the Tether legal staff and the NYAG office after they resolved the regulator’s longstanding inquiry into Tether.

In one of the communications, NYAG’s Office had questions regarding Tether’s commercial papers after the settlement.

As we stated in our previous letter, Tether has accounts with different banks. Tether asks banks to provide quotes for commercial papers, and these are then passed on to brokers or other counterparties that deal with the issuers of commercial paper directly, or on secondary markets.

CoinDesk won the legal battle to obtain the documents, which lasted nearly two years. Tether had filed a lawsuit in order to prevent the NYAG from providing them. Klaris Law represented CoinDesk in court and won a victory in Feb.

Tether released a statement prior to publication of this article acknowledging that the NYAG FOIL Officer had released the documents. The company failed to take the necessary steps to appeal the court order ordering the documents to be shared. A second statement was published on Friday, purporting to describe the contents of the documents.

The first statement stated that “Tether initiated this proceeding in the first instance to avoid the public dissemination and use of sensitive commercial data which could be exploited potentially by malicious actors.” However, we are committed to openness and must prioritise it over time-consuming and ineffective American litigation which distracts us from the real problems facing our community.

Tether didn’t immediately answer a list of detailed questions regarding some of the documents.

Tether said that it also “found it suspicious that USDT depegged” after millions of dollars worth of USDT were sold on decentralized financing pools “on or about the same date” as the New York government provided the documents to CoinDesk.

The stablecoin lost its peg briefly before 07:00 UTC (3:30 a.m. ET) on June 15, at least five hours before the NYAG FOIL officer shared the documents with CoinDesk’s attorneys. On June 15, the NYAG FOIL officer had shared the documents at least five hours prior to CoinDesk’s lawyers receiving them.

Marc Hochstein is the Executive Editor at CoinDesk. He said, “On June 12, CoinDesk was informed by our lawyers that we were finally going to receive the documents following a lengthy court battle in which Tether had tried to block disclosure.” “We didn’t share our victory with anyone other than our editorial team until we received the documents in New York on June 15, hours after USDT had lost its peg. CoinDesk is committed to the integrity of its reporting.”

Marc Hochstein, James Rubin and Pete Pachal edited the book.

UPDATE (16 June 2023 at 15:55 UTC). Clarifies the fact that Tether could have held funds in unspecified securities, in addition to commercial papers.