The official account belonging to Tether CEO Jan Ludovicus van der Velde was abruptly deleted early this morning after Bloomberg news media reported an investigation into the company’s USDT reserves.
What happen?
Stablecoin Tether has received legal and public attention following a report that revealed no private entity could confirm the $ 69 billion reserves backing the coin.
The USDT is pegged to the US dollar, meaning this coin needs comprehensive cash support for each of its withdrawals.
By 2021, Tether has generated 48 billion USDT with each worth $ 1. While the firm claims it is actually backed by the same amount in cash, there is something confusing:
Does the firm have sufficient financial support to support the issuance of the asset?
What would happen if individuals liquidated their investments on the same day?
Unfortunately, Tether failed to answer the above question.
With nearly $ 69 billion of coins in the cycle, there’s no denying Tether has valuations that match some of the largest banks in the United States (US) and around the world.
However, unlike most banks that provide investment protection for any eventuality, Tether on the other hand does not have any setup.
According to reports, if Tether faces a price collapse, global finances will suffer losses of up to nearly $ 2.3 trillion!
The firm's official website claims a $ 30 billion investment is in commercial papers but there is no support for the claim. Similarly, the statement related to the registration of this firm under the British Virgin Island Financial Regulator which was found to be false.
Bloomberg reports there is only one bank that works with Tether, located in the Bahamas has confirmed the stablecoin firm has large investments in Chinese entities and has provided crypto -backed loans worth millions of dollars.
Although Tether denies the allegations, there is no certainty confirming whether the firm has any investments in other Chinese firms.
At the same time, Bahamas -based bank Tether disclosed $ 15 billion in cash investments and low -risk bonds, but it bears less than 25% of the group’s cumulative reserves of $ 69 billion.
Earlier this year, the U.S. Department of Justice conducted an investigation to find answers to whether Tether executives, including CEO Giancarlo Devasini hid transaction records, including the links of several cryptocurrency transactions with some of its partners.
Tether CEO on the run?
Not sure if his Twitter account was deleted himself or was deleted by a third party. However, his last tweet before his account was deleted contained a statement: "Stay tuned" seemed to give the impression that the firm would be in touch with Bloomberg.
Based on Tether’s trading record on CoinMarketCap, the volume has dropped by 12% in 24 hours.
