Tether and Bitfinex’s general counsel—Stuart Hoegner, has recently made it known that 74 percent of the USDT stablecoin is backed by just 74 percent.
Hoegner, who is also Bitfinex’s general counsel made this known wrote in a recent affidavit. There it was stated that the company holds about $2.1 billion in cash and short-term securities.
This affidavit was filed in support of an Order to Show Cause to vacate or modify the NYAG’s ex parte order filed last week.
The general counsel confirmed that USDT is no longer backed 100 percent by cash or liquid assets.
“As of the date [April 30] I am signing this affidavit, Tether has cash and cash equivalents (short term securities) on hand totalling approximately$2.1 billion, representing approximately 74 percent of the current outstanding tethers.” the affidavit read.
Going by data provided by Omni Explorer, a block explorer for Tether, approximately 2.8 billion USDT tokens are currently has been issued.
Another attorney representing Tether, Zoe Phillips of law firm Morgan Lewis, has recently made it known that the firm is not required by law to hold $1 for every USDT issued.
“According to the Attorney General, the line of credit needed to be frozen because it improperly impairs the reserves Tether would use for redemptions. The Attorney General appears to believe that Tether must hold $1 in cash fiat currency for every dollar of tether. These allegations are wrong on multiple levels.” She explained.
“The terms of Tether and Bitfinex’s agreement were “negotiated on an arm’s length basis on commercially reasonable terms,”
It has also been pointed out by the Tether’s attorney, Stuart Hoegner that the platform’s website now states that its stablecoin is no longer 100 percent backed. This is coming after the company has denied allegations pointing to the opposite on several occasion.
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