Tether held part of its reserves in a small bank in the Bahamas
Controversial stablecoin issuer Tether has relied on an obscure Bahamian bank to store some of its reserves, according to a recent report by the Financial Times.
Capital Union, a Nassau-based banking institution, dove into cryptocurrency research last year. Last month, the bank selected Chainalysis, a leading blockchain sleuth, as its compliance partner to ensure compliance and detect risky transactions.
Tether has not confirmed whether or not it holds reserves with the tiny Bahamian bank.
Tether, which has faced numerous insolvency charges in the past, remains mum on where it holds its bank deposits.
Last year, the Commodity Futures Trading Commission fined Tether $41 million for lying about its stablecoin reserves. He had failed to properly disclose that the flagship stablecoin was partially backed by non-fiat assets.
Earlier this month, the company announced that it had reduced its exposure to risky commercial paper to just 17% while increasing its holding in US government bonds to 13%.
The company’s reserves also include crypto and precious metals, according to its quarterly reports.
Tether is no stranger to criticism, but the stablecoin came under greater scrutiny earlier this month after decoupling slightly from its peg following Tether’s collapse. Even though it managed to restore its peg relatively quickly, it provided more ammunition for naysayers who accuse the biggest cryptocurrency of being insolvent.
The market capitalization of USDT currently stands at $72 billion.