3 - 4 minute read
Stablecoin provider Tether has recently been at the center of controversy after a Bloomberg article alleged its exposure to the now-collapsed Signature Bank. However, Tether has issued an official response, “unequivocally re-iterating” that it has no exposure to Silvergate, Silicon Valley Bank, and Signature Bank.
The article claimed that Tether was gaining access to the United States banking system through Signature by encouraging users to send U.S. dollars via Signet to its Bahamian partner Capital Union Bank. However, Tether’s chief technology officer Paolo Ardoino took to Twitter on March 12 to clarify that the company had zero exposure to Signature Bank. He also tweeted on March 2 and 10 that the company had no exposure to Silvergate and Silicon Valley Bank, respectively.
Tether’s response highlights a section of the Bloomberg article that failed to explain that there was no account set up between Tether and Signature Bank. This response effectively denies any allegations of exposure between the two companies.
Tether’s Reserves and Safety of USDT
At the recent Paris Blockchain Week 2023 event, Ardoino revealed that Tether has around $1.7 billion in excess reserves. This announcement comes in the aftermath of the banking crisis and highlights the company’s financial stability.
Ardoino went on to call USDT one of the “safest assets to hold in the world.” This statement is particularly reassuring to traders and investors as it suggests that Tether is a reliable and trustworthy asset.
Dismissing Stale Allegations
This is not the first time that Tether has faced allegations of misconduct. The Wall Street Journal has previously accused Tether of faking documents to open bank accounts, but Tether has dismissed these allegations as “stale.”
Tether’s ability to maintain its reputation in the face of such allegations is a testament to its resilience and financial stability. The fact that it has come out unscathed from these accusations suggests that it is a reliable and trustworthy asset.
Advice to Traders
The recent allegations against Tether may have caused some concern for traders and investors, but Tether’s response and financial stability should reassure them. However, it is important to note that trading always carries a high risk, and traders should always do their own research and consider their own risk tolerance before making any investment decisions.
Tether’s response to the allegations of exposure to Signature Bank is a clear denial of any involvement between the two companies. Its excess reserves and safety of USDT make it a reliable and trustworthy asset, but traders should always do their own research and exercise caution when investing.