The most recent article from the Wall Street Journal against Tether, is a series of unsubstantiated conclusions. In a time where false information is being weaponized to cause harm across the globe, it is our responsibility to clarify the facts for readers.
The article seeks to discredit the work that Tether has put into transparent and honest communication to the public. BDO, a very reputable and independent Top 5 audit firm, is not a “Tether accounting firm”, as erroneously written by the WSJ. BDO will continue to have unrestricted access to any relevant information to perform their work and Tether will continue to share its attestations, despite continuous attempts by the media to disparage its reputation and that of top-ranking firms like BDO that are working with digital asset companies.
To clarify the points the article attempted to make, it is important to highlight the following.
The assumption that 3 months' worth of T-Bills is an unsafe asset, completely contradicts the longstanding fact that US Treasuries have been the premier safe asset worldwide for the past several decades.
To assume that our business is unprofitable is false. According to our Consolidated Reserves Report, Tether has never disclosed any equity despite being profitable for several years. This same report has been deemed appropriate by important stakeholders and it has been accepted by the NYAG. Perhaps the WSJ has confused Tether with some of its competitors.
To attack Tether’s reserves, when this margin also applies to other stablecoins on the market, further highlights an agenda by the publication to single out Tether and hurt its reputation.
Tether's disclosures have been the most honest and transparent in the market - everyone knows that we have not had an audit and they know we are working towards one. Rivals have allowed mainstream consumers to believe they are "safer" because they have been "audited," but no such audit has occurred. Except perhaps in the context of a capital raise/restructuring being the company that has been audited unprofitable. Other false truths that are out there about the category include being more regulated solely because the Digital token is issued by an entity in the United States and does business with US companies, which could be perceived as a country risk in case the US government imposes restrictions.
Finally, any reference to a margin of failure existing in Tether’s business model, assumes that the WSJ subscribes to the false short-seller narrative which suggests that short-selling Tether is even remotely possible. Alleged hedge funds that have been trying to create pressure “in the billions” to “harm” Tether liquidity represent a fundamental misunderstanding of both the cryptocurrency market and Tether.
Most importantly, Tether stands by the fact that it was able to easily redeem over USD 16B of the issued token in recent months, keeping essentially the asset allocation in line with the previous months while significantly reducing its exposure to commercial papers.
While it is true that the international accounting standard setters have not yet issued a recognized standard for digital assets accounting (including stablecoins), nor defined as this shall be considered in terms of regulatory capital requirements of regulated entities (which apply fractional reserves) and audits and attestations framework are the same applied to any industry/business, we very much welcome these developments. Until then, Tether will continue to provide full transparency in reference to the principle of International Financial Reporting Standards' described in the Consolidated Reserves Report which is, at the reference date, the most transparent report, since others limit their disclosures to stating that “Asset held are at least equal to the token in Circulation at the Report Date”.
Tether is committed to maintaining its role as the leading stablecoin in the market and we will continue to demonstrate our transparency, regardless of naysayers.
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