On November 1st Tether said they have established a banking relationship with the Bahamas-based Deltec Bank & Trust Limited.
Tether Limited made a few notable announcements on Thursday, November 1st.
We are pleased to be able to confirm that Tether has an account with Deltec Bank & Trust Limited https://t.co/LSn64soUsC . Balance confirmation at 2018-10-31 attached.
— Tether (@Tether_to) November 1, 2018
In a brief post, Tether wrote that Deltec carried out a “due diligence review of our company” before taking it on as a client. The post also came with an attachment to a letter penned by Deltec confirming the “portfolio cash value of your account with our bank was US$1,831,322,828,” at the close of business on October 31st.
As of press time, CoinMarketCap listed Tether’s circulating supply at 1,776,421,736 UST with a price of $0.98.
Letter Provided ‘Without Liability’
In the letter, Deltec was clear to note the letter with Tether’s portfolio cash value was “based on the information currently in our possession.”
The letter was just signed by “Deltec Bank & Trust Limited” with a quick scrawl, which attracted the attention of some commenters on Reddit.
A few people questioned why a person at the bank would not be willing to attach their name to the holdings report. Tether has been the focus of intense scrutiny and attention amid allegations it does not actually hold the dollar reserves it claims.
Tether asked law firm Freeh, Sporkin & Sullivan back earlier in the year to carry out a review of its holdings. The firm concluded Tether’s “unencumbered assets exceed the balance of fully-backed USD Tethers,” as of June 1st.
However, the law firm noted the review was not conducted with Generally Accepted Accounting Standards. Many question Tether’s holdings claims because they have so far been unwilling to undergo an audit.
Others point to a mid-October Tweet by Cameron Winklevoss, co-founder of the Gemini dollar, who wrote how it is not possible to carry out an audit on a stablecoin since “there is no financial report framework.” Winklevoss argued a 3rd party would have to just attest to the accuracy of an assertion about a 1:1 peg.
There is no financial report framework w/r/t to audit conformity w/ a stabelcoin. So you can't perform an "audit." You must instead rely on a 3rd party to attest to whether an assertion (that there is a 1:1 peg) is accurate.
— Cameron Winklevoss (@winklevoss) October 17, 2018
A Rigorous Review by Deltec
In the blog post, Tether said Deltec looked over compliance processes, policies, and other procedures, and carried out background checks of company officers, shareholders, and ultimate beneficiaries.
Tether wrote the review process occurred across several months and included an assessment “of our ability to maintain the USD-peg at any moment.”
The company said they are currently registered with the U.S. Treasury Department’s Financial Crimes Enforcement Network and is reviewed by Deltec “on an ongoing basis.”
What do you think of Tether’s new banking relationship? Let us know in the comments!
Image courtesy of Bitcoinist archives, Shutterstock, Twitter (@Tether_to, @whalepool).