Tether, the issuer of the world’s biggest stablecoin (USDT), has responded to the Wall Street Journal’s claims regarding rising loan risks, claiming that its USDT loans are overcollateralized.
Tether Responds to Media FUD
In a December 1st post, the WSJ, which has been critical of Tether, reported that the company had “increasingly been lending its own coins to customers rather than selling them for hard currency upfront.”
According to the WSJ, Tether’s loans reached $6.1 billion as of September 30th, which equates to 9% of the company’s total assets. The newspaper adds that the position put Tether at risk of not having “enough liquid assets to pay redemptions in a crisis.”
Tether, in a blog post titled “WSJ & CO: The Hypocrisy of Mainstream Media, Asleep at the Wheel of Information” has addressed the fear, uncertainty, and doubt (FUD) peddled by mainstream media.
Tether’s USDT Loans are Overcollateralized
Although Tether affirms that the secured loans were real, the stablecoin issuer explained that the WSJ completely missed the mark. They say the publication mistook “the USDT itself for the collateral that underpins it.”
According to Tether, all USDT “secured loans are extremely overcollateralized and even backstopped by Tether’s additional equity if needed.” Tether also adds that its equity was growing quickly.
On the Flipside
- According to Tether 82.45% of the company’s reserves are in “U.S. Treasuries and other cash equivalents whose yields are at multi-year highs.”
Why You Should Care
As the biggest stablecoin issuer, Tether has constantly been the subject of scrutiny. However, the company has always provided evidence of its reserves.
How has Tether reacted to the FTX collapse? Read: