Having weathered the storm of controversies surrounding ties with the Puerto-Rico-based Noble Bank, Tether Limited confirmed Deltec Bank & Trust as its new banking partner in a statement on November 1. The issuer of the dollar-pegged stablecoin (USDT) put rumors to rest after it announced the Bahamas-based banking provider and trust services as the financial institution where its funds are now domiciled. The statement recapitulated on all tether in circulation being fully backed by US dollars.
According to its website, Deltec Bank & Trust Limited was founded in Nassau, Bahamas in 1959. It specializes in the provision of private banking, wealth, and trust services, family office services, investment management, and others. The company operates as a subsidiary of Atlas Capital Group Holdings.
“USDT in the market are fully backed by US dollars that are safely deposited in our bank accounts,” the statement reads.
Even though the speculation has been rife in recent weeks, Tether clarified Deltec’s decision to accept it “after due diligence review of our company”. The statement expatiate further:
“This included, notably, an analysis of our compliance processes, policies and procedures; a full background check of the shareholders, ultimate beneficiaries and officers of our company; and assessments of our ability to maintain the USD-peg at any moment and our treasury management policies”
Statement Clears the Air on Approval in the US
The Hong-Kong based Tether Limited is registered with the Financial Crimes Enforcement Network of the US Department of the Treasury and subscribes to the highest standards of the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) procedures.
Cash Value Revealed
Knowing well the skepticism surrounding the existence of the US dollars backing the tether in circulation, Tether Limited quelled misgivings by disclosing a letter obtained from Deltec Bank and Trust Limited stating a sum of $1,831,322,828 as the cash value of Tether’s account.
Whereas, the circulating supply of tether reported on coinmarketcap.com is $1,776,421,736. The surplus in funds lends credence to the company’s stance of all circulating USDT being backed by US Dollars.
Controversies with Noble Bank
Tether and its cryptocurrency exchange Bitfinex considered other options for banking support after Noble Bank began to seek a buyer following 2018’s elongated cryptocurrency bear market. The bank reeled under flailing revenues and opted to “sell itself for a price between $5 million and $10 million based largely on the value of its Puerto Rican license to operate as an international financial entity.”
With the latest statement, speculations surrounding the imminent collapse of Tether and Bitfinex will surely be put to rest in the meantime.
Scrutiny not Yet Over?
Deltec Bank & Trust Limited issued a letter to Tether Limited confirming the portfolio cash value of its account based on the information currently in its possession.
Eyebrows were raised after the letter was signed by “Deltec Bank & Trust Limited” with something more like a scribble. The absence of an undertaker appending his or her signature means the holding report was issued without liability.
It will be recalled that Tether’s transparency update in June was put under intense scrutiny, causing the company to enlist the services of Freeh, Sporklin & Sullivan LLP (FSS) to assess bank documents and conduct a random inspection of circulating Tethers and corresponding reserves of US dollars. Tether was not privy to the balance confirmation dates that were chosen according to the FSS report.
The firm went on to confirm that “Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018.” The law firm, however, noted in the report that their financial review was not conducted with Generally Accepted Auditing Standards because they are not an accounting firm.