Editor | Lu Xiaoming
Editor | Lu Xiaoming
Reporters Wu Suixin and Zhang Xue also contributed to this article
USDT, which has fallen into the vortex of public opinion, has a little trouble and disturbed the confidence of the currency circle.
Tether, the USDT issuing company, has been questioned many times about over-issuing stablecoins, that is, it does not have enough U.S. dollar reserves behind it to support the issued stablecoins.
To this end, in early November of this year, Tether published a letter from Deltec Bank in the Bahamas, stating that as of October 31, 2018, the total value of Tether's investment portfolio in the bank exceeded US$1.8 billion. Some views doubted the reliability of the letter, but soon after it was reported that the letter was indeed written by the staff of Deltec Bank, and many people's doubts could only be dispelled temporarily.
December 26,A report written a few days ago went viral. The report comes from Radarbtc. After studying the changes in the public data of the Central Bank of the Bahamas, it is believed that these data show that Tether does not have more than $1.8 billion in deposits in Deltec Bank. Subsequently, Zhao Dong, a shareholder of Bitfinex, responded that the report was not accurate, and the Central Bank of the Bahamas did not include offshore dollars. Bitfinex is the same parent company as Tether.
Odaily asked Zhao Dong for confirmation. He said that if Tether's funds are stored in Deltec's foreign branch, the funds are offshore and will not be included in the Central Bank of the Bahamas.
He recalled, "When we made a withdrawal, we found that the withdrawal bank showed a bank in the United States (not Deltec Bank), and we were also puzzled." However, when Odaily asked which bank it was and why such a strange situation occurred , He said that it is inconvenient to disclose the name of the specific bank. He heard that it is very common for small banks to open position accounts in large banks, but he is not familiar with the operation of foreign banks and he cannot explain it.
Odaily consulted with a person in the cross-border remittance industry, and the person said that if it is a cross-border business, it is indeed possible. "It is not ruled out that Deltec has a position account in a certain bank in the United States. For example, if a customer deposits money in a certain bank, the bank's fund position will be transferred to the position account of various banks around the world. One day your user will withdraw cash in the United States. , he must be the fastest to transfer funds from the position account in the United States. In this way, you may see that you deposit money in a bank in country A, but the withdrawal shows that it is in another bank in the United States.”
He also said that banks can indeed open mutual account accounts, and it is indeed common for small banks to open accounts in large banks. It is difficult to set up a bank abroad, and many banks will choose to open an account with a local bank. But whether Tether is in a similar situation is difficult to prove now.
In addition, after carefully studying the above report, Odaily believes that its argument is indeed not rigorous enough, and the subject does not seem to be authoritative. The report said the investigation opinion came from Radarbtc’s Marcel and Luis, and the latter’s accountant.Speculation based on a brief Portuguese introduction of an account named Radar BTC on LinkedIn, which is most likely a cryptocurrency news and review platform based in Campo Grande, Brazil.
After a long time of dispute, whether Tether has a deposit of 1.8 billion US dollars is still a legend that cannot be verified or falsified. The farce this time reflects that the confidence of public opinion in USDT has been in the face of many crises of trust. Even if a letter from the custodian bank is shown, it cannot be exchanged for trust; after doubts arise, no one is willing to study carefully. Whether the report is tenable, but only saw "the Tether of the over-issued and fake USDT in their impression".
Zhao Dong said that the many rumors about Tether are very targeted and fabricated. It stands to reason that if Tether applies for regulatory compliance, all doubts will be solved by itself, but Zhao Dong just said: "It is impossible to do compliance." Odaily asked again whether it was because the firm was unwilling to audit, and had not received a response by the time of publication.
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Report logic: Bahamas central bank data show that Tether has less deposits
According to the original report, led by Marcel and Luis from Radarbtc, their team of certified public accountants studied the raw data of the Central Bank of the Bahamas and found that Tether did not have as many assets in the Bank of the Bahamas as it claimed (ie $1.8 billion).
The Central Bank of the Bahamas publishes a monthly financial statement that summarizes the funds of all banks in the Bahamas and provides comprehensive financial indicators for all banks on the island. The accountant based his analysis on the Bahamas central bank's financial statements for October this year.Here is a link to the latest report for October:《October Report
The total assets of all banks, including assets and bonds (M2 assets), are currently US$6.7 billion.
Against the assumption by many, Tether’s funds stored in Bahamian banks may be denominated in U.S. dollars, not Bahamian dollars. The authors of the report believe that this assumption does not exist, as the financial statements state on the first page that all assets and transactions are calculated in Bahamian dollars (1:1 exchange rate between US dollars and Bahamian dollars).
After responding to the hypothesis, the author unfolds the analysis:
1. External Liquid Assets (External Liquid Assets) is 1.7 billion yuan, which is less than the US$1.8 billion claimed by Tether (external liquid assets, that is, the total amount of foreign cash held by all banks in the Bahamas);
2. The total amount of foreign exchange reserves (External Reserves) is 1.3 billion yuan, which is less than the 1.8 billion US dollars claimed by Tether;(Odaily Note: The author of the report believes that the foreign exchange reserves here include foreign currencies outside the Bahamas, that is, the nostro account—the foreign currency accounts held by domestic banks in overseas banks. This is what Zhao Dong’s response refuted.)
3. Excess reserves show that the Bahamas is actually selling more foreign currency, so it is impossible to accept Tether's 1.8 billion (excess reserves, that is, the total amount of foreign capital held by all banks in the Bahamas exceeds the "target" set by the Central Bank of the Bahamas "amount);
4. From the beginning of the year to the present, the net purchase amount is 722 million yuan, and the net sales volume is 499 million yuan, the sum of which is less than 1.8 billion yuan;
5. The total amount of deposits in Bahamian banks is 6.4 billion yuan, and the fluctuation is very small throughout the year. If Tether deposits 1.8 billion yuan, it is impossible to have no fluctuations;
6. Bloomberg reported that Tether transferred more than 1.8 billion U.S. dollars in deposits to Deltec in July, but the financial statements of the Central Bank of the Bahamas in June, July and August basically did not fluctuate, but Tether claimed to have transferred 17 U.S. dollars in July. billion to Deltec Bank in the Bahamas, which is clearly unreasonable;
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Without supervision and authoritative external audit, who can verify that Tether really has so many deposits?
The report has aroused some interest. Later, the official account"Pretend to be in Flower Street"image description
(Central Bank of the Bahamas third quarter earnings report)
According to the analysis of "Pretend to be in Flower Street", the "non-resident foreign currency deposits" of Bahamian banks in July were about 1.6 billion US dollars more than in June, which was similar to the number stated by Tether, but the money was transferred again in August; According to the time announced by Tether, as of October 31, its account balance exceeded 1.8 billion US dollars, so it can only be judged by looking at the financial report of the Central Bank of the Bahamas in the fourth quarter.
But in fact, the "non-resident foreign currency deposits" in August and September in the quarterly report of the Central Bank of the Bahamas have fallen sharply, and the amount is nearly 1 billion US dollars; The proof is known by Tether access.
In addition, according to the current large outflow of foreign currency in the Bahamas, even if the fourth quarter financial report comes out, it seems unscientific to compare October data with September. Because even if Tether deposited $1.8 billion in October, if this value is much smaller than the outflow, the October data will also decline.
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Trust the Tether company that lights up the red light
Since the issuance of USDT, Tether has promised to anchor the U.S. dollar and strictly abide by the 1: 1 margin system, that is, for every USDT token issued, its account will have an additional USD 1 of capital reserves to ensure the liquidity between Tether and the U.S. dollar .
Paxos is a company approved by the New York Financial Bureau to issue stable coins. In an interview with Odaily, its CEO said that every year, the regulators will visit the company for four weeks, and Deloitte, one of the four major accounting firms, will conduct an external audit of the company.
However, so far, there has not been an authoritative external audit to prove that Tether's corresponding fund reserves do exist.
At the end of March 2017, the Tether team announced its fund reserves on the official website, and there were 44 million US dollars in the account at that time. Since then, USDT has experienced a crisis of trust many times, mostly because of its opaque capital reserves and financial information.
according to
according toBlock rhythm report, "Phil Potter also admitted that Tether's lawsuit against Wells Fargo in Taiwan is meaningless, just to buy some more time". In April this year,Bitfinex Sues Wells Fargo, because the latter suspended Bitfinex's U.S. dollar electronic remittance business. Bitfinex is a client of four Taiwanese banks that use Wells Fargo as an agent to process electronic remittances in U.S. dollars.
In addition to internal personnel problems, USDT’s custodian bank is also a “mystery”.
Before November 2018, Tether had not officially announced the custodian bank of its assets, and the news related to the custodian bank all came from media revelations.
End of May this year, Bloomberg quoted people familiar with the matter as saying that Noble Bank (Noble Bank) took over the banking business of Bitfinex (the same people who manage Tether and Bitfinex) last year. Investors have only begun to have some awareness of USDT's custodian banks.
A Bloomberg report on October 1 stated that Noble Bank has lost multiple customers including Tether, the issuer of USDT, and Bitfinex, a cryptocurrency exchange, and is no longer profitable, and is looking for buyers to sell assets.
The report triggered panic in the market, USDT plummeted all the way,On October 15th, USDT "flash" crashed, market trust plummeted.
In November, Tether officially announced that it has established a partnership with Deltec Bank & Trust Limited in the Bahamas. Noble Bank thus became the "predecessor".
Tether has twice released financial data reports, but the authenticity of both reports has been questioned.
In June of this year, Tether released a "Transparency Update Report", using this report to testify that USDT is backed by sufficient U.S. dollar reserves. But the report was written by a law firm called Freeh Sporkin & SullivanLLP, one of its founders, Louis Freeh, is a former FBI director.
This transparency report has instead sparked more controversy.There is a view that: "The report issued by the FSS did not disclose the detailed information of the bank reconciliation, and it was impossible to confirm whether the bank and the law firm had illegal operations. And many questions were not answered, such as whether the auditors communicated directly with the bank and there was no Tether during the period. Participating, is the bank where Tether's billions of dollars in deposits are deposited is a well-known bank..."
The outside world also questioned that Tether did not seek an audit from an authoritative accounting firm, but Tether said that none of the four major accounting firms were willing to endorse it, and they could only turn to a law firm for help.
Furthermore, according to the previousmedia organization, There is a relationship between Bitfinex, Tether, Tether's bank, and the audit legal team, which affects the credibility of the audit report.
At present, the market share of USDT has declined. If Tether cannot solve the auditing and trust issues, it may gradually disintegrate the market's confidence in it.
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I am Odaily reporter Suixin (WeChat ID wsuixin12), Qin Xiaofeng (WeChat ID: pnjun0811), Cha Liang (WeChat ID: hao1250549397), editor Lu Xiaoming (WeChat ID: lohiuming), please note your name, unit, position and reason when adding friends.
References:
Game of Thrones in the crypto world, Tether's delusions
Crypto-Mystery Clues Suggest Tether Has the Billions It Promised
Timeline | The past and present of Tether and Bitfinex
Is it true that Tether allegedly has $2.2 billion in reserves and puts money in offshore banks?
4 Licenses US Cryptocurrency Exchanges Need to Obtain in 2018
