Tether has grown dramatically over recent months, despite banking issues. We are grateful to all of our users and exchanges that continue to fuel the adoption of Tether as the de facto standard for ‘crypto dollars.’
The Tether team wants to update the community on several items: first, to share exciting news about the future of Tether; and, second, to address misinformation that a small group of individuals has been spreading on various online forums about Tether and exchanges that are integrated with Tether.
In April 2017, we announced that Tether’s primary banks in Taiwan were being blocked by U.S. correspondent banks, including Wells Fargo. We are among a number of innovative companies in the digital token space experiencing such banking roadblocks.
Since that announcement, we have been diligently working on other payment avenues and channels, including third party payment processors and banking relationships in countries with friendlier correspondent banking connections. We have found and will continue to find solutions, and we appreciate the community’s patience as we bring these new relationships online.
We have been busy establishing a global network of money-transfer channels designed to be resilient against further aggressive action from correspondent banks. We have also opened an escrow-based relationship with a U.S.-based institution to service qualified corporate customers. While we are aware of and understand users’ desire for specific, public updates, we believe at this time that it would be a mistake to be too forthcoming about the specifics of any particular money transfer solution. We are comfortable, however, sharing the following information:
- Large customers are still able to move money into and out of Tether.
- Depending on the jurisdiction, smaller retail-type customers will continue to encounter difficulties in moving funds using traditional payment rails.
- Even as we begin to normalize traditional money transfer operations, we will likely soon enforce substantial minimums on the creation and redemption of Tethers.
- Euro payments should become less problematic, as transactions may be routed through a UK-based (and FCA-regulated) payment processor with whom we are working.
While our banking challenges are troublesome and distracting, tens of millions of dollars are able to flow in and out of Tether daily using the channels we have established. Although not available to all users, these flows have been sufficient to bring markets supporting Tether-based trading pairs back into alignment with markets supporting USD-based trading pairs.
New Tether Currencies
As we establish additional banking relationships, we should be able to offer additional currency options to Tether users. Our beta of EURT tokens has demonstrated our ability to issue additional currencies, and others such as JPY and GBP will be available soon. Additional exchanges that support these currencies should also be coming online.
Tether on Ethereum
After many months in code review, we are excited to announce the forthcoming launch of Tether USD tokens as an ERC20 token on the Ethereum network. Initially, we are creating a limited supply for contract developers to play with, but we will shortly be offering a service on tether.to to exchange Omni-based tokens for ERC20-based tokens and vice versa. We are excited to bring a credible dollar-backed token to the Ethereum community for use in fast, easy transfers and smart contracts.
Tether on Litecoin
The team behind the Omni Layer also has a live beta deployment of Omni on Litecoin, and we are actively testing Tether issuances and transfers on the Litecoin network. Negligible-to-zero fees and faster block times make for a sensible alternative to the Bitcoin blockchain for issued asset applications. Similar to the ERC20 token, we will be offering a service to swap into and out of Omni on Litecoin tether tokens. Several existing Tether-integrated exchanges are already testing Omni on Litecoin integrations to support this deployment.
Tether on Trezor
The Omni Layer team has also been working with the TREZOR development community to complete the integration for Tether USD and other Omni on Bitcoin-based assets with the TREZOR hardware wallet. Compatibility and release announcements will be forthcoming.
Tether on Lightning
We are also excited to announce the initial discovery and integration discussion with the Lightning team for low-cost, instant transactions of Tether currencies on the Lightning network. This should also facilitate atomic swaps of Tethers between the Omni on Bitcoin and Omni on Litecoin chains.
We are aware of online discussions about Tether’s lack of publicly-available audits. Periodic audits of our bank balances have been performed by the Taiwan-based auditing firm TOPSUN CPAs & Co. The results of those audits were for the benefit of shareholders and were not in a form suitable for public consumption (to begin with, they were in Mandarin). Nonetheless, we have asked them to prepare the following attestations (PDFs linked) in English, for release to the community, covering December 31, 2016; January 31,2017; February 28, 2017; and, March 31, 2017. As we are no longer banking in Taiwan, and given that we are achieving substantial scale, we have engaged Friedman, LLP, in New York, to perform comprehensive balance sheet audits on a quarterly basis going back to Dec 31, 2016. We will share those results with you as they become available in the coming weeks or months.
We have also read online about many outlandish conspiracy theories suggesting that Tether is not backed 1:1 by currency on deposit with banking institutions. Any such claim is unequivocally false, and the audits will bear that out. Our Terms of Service have been carefully picked apart by various malcontents and twisted to suggest that Tethers would not be redeemable for currency on some bizarre, malicious whim by Tether. That is untrue. While we reserve the right not to redeem for any particular customer, as we must, we will not do so for no reason. We have a duty to try to ensure that our service is not being used by persons from sanctioned countries, that is otherwise on a sanctions list, or that has some background check problem. In short, redemptions will not be unreasonably denied, but we reserve the right to selectively deny redemption and creation of Tethers on a case-by-case basis. As such, this policy, which is necessary from a regulatory perspective, has no bearing on our presentation of the liabilities of the company. The company considers all tethers outstanding to be liabilities for presentation on the balance sheet for which there is always an equivalent amount (or greater) held in assets to back those presented liabilities. Full stop.