In Brief:
- Tether had published a blog to answer Bloomberg’s Business week article
- Bloomberg claimed that Tether’s USDT doesn’t hold enough assets to maintain a 1-1 exchange rate
- Tether Called this article “pre-packaged and pre-determined narrative.”
Bloomberg attacked one of the leading Stablecoin issuers, Tether, by calling it “fraud” by posting a BusinessWeek article on Oct 7 titled “ Anyone seen Tether’s Billions?”. Tether responded to this article by condemning the news giant, Bloomberg.
Bloomberg had claimed that the stablecoin is a scam from Tether as it does not have sufficient assets to back it. According to Tether’s official report, Currently, 69 billion USDT tokens are in circulation.
“Tether Holdings doesn’t have enough assets to maintain the 1-to-1 exchange rate, meaning its coin is essentially a fraud.”
Moreover, to pump fire in this controversy, Bloomberg published another article with the key points of the last article.
In this claim, The news giant has claimed that Tether’s reserves contain “billions of dollars of short-term loans to large Chinese companies.”
Bloomberg also condemned Chief Financial Officer Giancarlo Devasini by giving reference to the chief executive officer of Noble Bank, John Betts. He alleges Devasini invested some of the reserves “to earn potentially hundreds of millions of dollars of profit for himself.”
Earlier, the U.S. The Department of Justice had also targeted Tether’s executives during the investigation of criminal bank fraud.
Tether’s Response
Tether responded to this scathing report by posting a blog on the website,
“A one-act play the industry has seen many times before, taking snippets of old news from various places and dubious sources, and making it fit a pre-packaged and pre-determined narrative.”
The company added that Bloomberg “refuses to let the facts get in the way of the story” and count on John Betts, whom Tether terminated as its banker.
“Betts has also been accused of engaging in egregious and wasteful self-dealing and seeking to enrich himself at Noble’s expense.”
Still, Delay in Audit
Tether claims that all of its tokens are fully backed by the assets, But still, Tether has not submitted a complete and full Audit of its reserves. In May, USDT reserves are heavily backed by the dollar, but it also contains portions of cash equivalents, bonds, Secured loans, crypto assets, and other investments.
Earlier this year, in July, Tether General Counsel Stuart Hoegner said that firms were going to be the first to conduct a full audit.
Moreover, U.S. regulators continue to control stablecoins expansion with the claim that it is a threat to their financial system.
On this Tether stated, “While this may threaten the establishment of traditional financial systems, we will continue to work for the underrepresented.”
