Deltec, the Bahamas-based bank of Tether, announced Thursday that it is investing some client funds in bitcoin. A Tether attorney denied that any of those funds were from Tether.
However, the announcement, made by Deltec Bank & Trust Chief Investment Officer Hugo Rogers during a video for the annual review, could raise new questions about whether the USDT stablecoin pegged to the dollar, which is theoretically backed by cash and cash equivalent ”, as well as by“ other assets and credits received for loans ”, is not actually supported in any way by bitcoin.
Deltec's decisions are not about Tether
“We bought bitcoin for our customers at around $ 9.300, it worked very well until 2020 and we expect it to continue to perform well in 2021,” Rogers said in the video. Through a spokesperson, Tether general counsel Stuart Hoegner confirmed that Deltec is still the stablecoin issuer's bank.
He later said: “We are aware of the recent statements by Deltec Bank & Trust Limited regarding the purchase of digital tokens for and on behalf of their customers. Tether does not outsource decisions on its reserves.
Deltec does not purchase digital tokens for and on behalf of Tether. " Following the publication of this article, a Deltec attorney, Elisa D'Amico, partner of K&L Gates LLP, said: “Although some investment portfolios of the bank's clients hold positions in bitcoin products, this is mainly limited to high-profile individuals. -net-worth and external asset management.
Furthermore, Mr. Hugo Rogers' statement in the video regarding investment strategies for certain clients had no relation to Tether's depository activities with Deltec and, in fact, made no reference to Tether.
Is Bitcoin's price linked to Tether's stablecoin?
Deltec became better known in 2018 after Tether published a letter from the bank announcing that it had $ 1,8 billion in cash and other assets, roughly equal to the amount of USDT in circulation at the time - here the quotation in real time.
A Deltec executive later confirmed that the unsigned letter was authentic. The following year, the New York Attorney General's Office revealed that Bitfinex, Tether's sister company through shared ownership and executives, had lost nearly $ 1 billion after its payment processor bank accounts were frozen. and the funds seized.
Bitfinex had covered the losses by borrowing from Tether's reserves, which are meant to support the stablecoins it has in circulation. Until January 15, the companies were under an injunction to cease any further lending activity between them.
The Tether issuance has been in crisis since the injunction was first issued and there are currently around $ 25 billion in USDT in circulation. Bitcoin's price, which some academics and investors claim is supported by the USDT issue, has hit new price records, even surpassing $ 40.000 in recent months.
