After a two-year legal battle, journalists have finally received documents in response to a New York State Freedom of Information Law request about the details of Tether’s reserves. The documents were released in February after CoinDesk won the legal fight with Tether.
The documents revealed that Tether had billions of dollars’ worth of commercial paper issued by financial institutions worldwide. It had tapped a number of banks to hold its funds, and it had to detail its procedures with the New York State Attorney General’s office (NYAG) even after settling the regulator’s inquiry into the company.
The documents also included portfolio reports from banks that held Tether’s funds and letters from Tether’s counsel to the NYAG detailing the company’s know-your-customer (KYC) and other protocols.
Whether the Tether stablecoin (USDT) has been fully backed with reserves has been a question for years, said journalists. In 2019, skeptics were vindicated after the New York Attorney General’s office announced there was a roughly $850 million hole caused by Tether loaning funds from its reserve to Bitfinex, its sister company.
Tether published a statement before any CoinDesk reporters even had a chance to dig into the documents, and published a second one on Friday after Bloomberg published a story on the documents. As of press time for this newsletter, Tether has yet to respond to an initial list of detailed questions sent to the company.