Tether Limited has officially confirmed that its establishment of a financial relationship with a bank in the Bahamas. Tether Limited is the issuer of USDT (tether stable coin), the stable coin pegged on the US dollar.
Due Diligence Before The Opening Of The Account
The Crypto firm which has become infamous for not carrying out their operations in a transparent manner came out publicly on Thursday to announce its banking partnership with Nassau based Deltec Bank. Deltec Bank is a reputable financial institution that has been around for the past seventy-two years.
Contained in the announcement were Tether’s statements on the process which Delta followed in opening up the account. Tether stated that Delta agreed to open up the account after carrying out a review of the company that lasted a few months. Announced as one of the ways in which Delta reviewed Tether was the confirmation that the firm was indeed able to maintain the $1 USD peg.
Tether stated that Deltec agreed to open the account after carrying out due diligence on the part of reviewing the company. Among the reviews that were carried out included the analysis of Tether’s compliance policies, processes and procedures, a thorough background check of the company’s shareholders, beneficiaries and officers, confirmation of the company’s ability to maintain the peg and the company’s treasury policies.
Tether Has Enough Reserves To Peg Stablecoin
The statement confirmed that the fact that the financial institution opened the account showed that the company was able to satisfy whichever qualifications the bank had. The statement went on to say that reviews will be carried out on a continuous regular basis by the bank.
The company went on to publish a confirmation from Deltec that it is indeed holding $1.83 billion in reserves at the bank which is more than enough reserve for the 1.78 billion in outstanding USDT. The company has recently come under fire for with claims of it only holding a fractional reserve.
The statement which came from the Deltec Bank and Trust Limited reiterated that the confirmation of the company’s reserves was done with neither Deltec Bank & Trust Limited, its officers, shareholders, directors nor employees having any legal responsibility towards the company, affirming that the information was purely based on what was in the possession of the bank.
The statement went on to say that as at the close of business on the 31st of October, the value of the portfolio the company held with the bank was US$1,831,322,828.
Report From Legal Firm To Clear Tether
Before this public confirmation was made, the first mentioning of the possible relationship between Tether and Deltec Bank & Trust Limited was made by The Block. Before moving to this bank Tether was banking with Noble Bank which is based in Puerto Rico. The bank has since been put up for sale on account of the departure of major players in the Crypto sector.
Mid this year in an attempt to answer the allegations that it did not hold enough in its reserves to back the token, Tether published a report from US legal firm Freeh, Sporkin & Sullivan LLP.