NY AG's documents: Tether once counted Chinese companies' securities among its reserves; in July 2022, Tether claimed not to be holding Chinese commercial paper
The disclosure extends a long-running debate over the composition of USDT’s backing. Tether had previously reported sizable commercial-paper exposure, including $30B in commercial paper disclosed in 2021, before describing a reduction in that category.
It also complicates the company’s subsequent shift in messaging and portfolio composition: Tether later said it had eliminated commercial paper in favor of US Treasury bills. The immediate issue is whether users and regulators can clearly reconcile past reserve categories with later statements.
First-order effects
Tether faces renewed pressure to explain the distinction between Chinese-company securities previously counted in reserves and its July 2022 assertion that it held no Chinese commercial paper.
The documents give regulators, counterparties, and USDT holders a more concrete basis to scrutinize the issuer’s historical reserve disclosures and asset classifications.
Second-order effects
Other stablecoin issuers have a stronger incentive to provide reserve reporting that distinguishes commercial paper, corporate securities, and government debt rather than relying on broad labels.
Reserve attestations and assurance providers may face greater demand for disclosures that let readers compare asset categories across reporting periods.
Third-order effects
If such disclosure gaps continue to surface, stablecoin competition is likely to turn more on verifiable reserve transparency and asset quality, not solely on a token’s stated peg.
The episode reinforces a regulatory trajectory toward standardized reserve definitions and more readily auditable reporting, though the eventual requirements remain uncertain.
The trend: Stablecoins are moving from broad claims of backing toward closer scrutiny of the precise assets, classifications, and reporting behind their reserves.
NEW for #FOIAFriday: Docs released by NY AG in response to @business FOIL request show Tether Holdings once counted securities issued by Chinese companies among the reserves backing its USDT stablecoin, the world's largest @Yueqi_Yang @MuyaoShen & me https://www.bloomberg.com/...
Tether raises the bar of transparency in the industry, dropping its opposition in the FOIL matter. In moments of global financial uncertainty, like the current one, we believe it's important to give a strong signal to our community. Prioritizing openness, stability and liquidity.…
Tether lost their bid to quash disclosure of their periodic reports to New York required by their settlement agreement, and the reports (predictably) prove that they have in the past lied egregiously about the composition of their reserves. https://www.bloomberg.com/...
A long-running legal battle to unlock documents included in an NYAG settlement paid dividends for @CoinDesk, the fruits of which are found in this revealing piece on @Tether's financial relationships by @nikhileshde https://www.coindesk.com/...
Only two years of legal battle, and we finally know what @Tether_to had in its vaults to back $USDT... And yes, part of the reserves were commercial papers by Chinese banks, as many had suspected for a while. @nikhileshde doing the work we exist for. https://www.coindesk.com/...
The NYAG has has finally released docs that Tether was required to submit detailing its reserves, which Tether fought to keep secret from the public. Major cred to @CoinDesk who led the FOIL charge and was first to request the filings https://www.bloomberg.com/...
Tether held securities issued by major state-owned Chinese firms incl. Industrial & Commercial Bank of China, China Construction Bank and Agricultural Bank of China The documents didn't list any debt of China Evergrande Group https://www.bloomberg.com/... 2/@crypto
Tether was once backed by Chinese securities and had a sizable lending program of $5.1 billion in early 2021, documents released by NY Attorney General show. CoinDesk first filed for the public records request W/@MuyaoShen @JasonLeopold @crypto https://www.bloomberg.com/... 1/
The documents detail Tether's banking relationships, lending, and investments made through reserve assets as of the end of March 2021 Tether issued loans in USDT to third parties and said it had fewer than 30 borrowers https://www.bloomberg.com/... 3/
@zoomerfied @eliant_capital The fraudsters are scared, which is why their CEO and CFO are in hiding and these release nonsense blog posts like this: https://tether.to/...
.@Tether_to: FUD with $USDT could be linked to @CoinDesk. CoinDesk demanded public disclosure of Tether's 1st quarter report. Tether decided to deny CoinDesk, but CoinDesk demanded documents from the New York Attorney General's office. https://tether.to/... [image]
Tether issued a statement today pointing fingers at @CoinDesk for leaking “misguided” information which led to the massive shorts earlier. interesting. full statement here: https://tether.to/... [image]
new conspiracy just dropped “We find it suspicious that today's attack on USD₮ via both DeFi and centralized exchanges occurred on the day that materials were handed over to CoinDesk.” https://tether.to/...