Abstract：Tether, which is controlled by Hong Kong-based Ifinex, reported a $700 million "net profit" in the December quarter in a recent attestation report. The money has been added to the firm's reserves, according to the corporation.
Tether released its latest quarterly financials on Thursday lastweek, revealing for the first time that the world's largest stablecoin issuer made a profit.
Tether, which is controlled by Hong Kong-based Ifinex, reported a $700 million “net profit” in the December quarter in a recent attestation report. The money has been added to the firm's reserves, according to the corporation.
Tether said its latest quarterly performance was boosted by the Federal Reserve's interest rate rises, which led to higher returns on government securities. “Tether is not providing any financial details other than those stated in the CRR [Consolidated Reserves Report],” the company said in an email to CNBC.
Tether earns money via a variety of fees, including a $1,000 withdrawal charge (with a $100,000 minimum withdrawal requirement), investments in digital tokens and precious metals, and lending to other institutions.
Tether is the creator of USDT, the world's most valuable stablecoin in terms of market value. According to WikiBit, Tether has a good track record when it comes to overall management, and has good reviews from traders who use USDT across the globe. Stablecoins are tokens that are designed to be completely backed by an equal value of reserve assets at all times.
The concept is that if someone wishes to sell one unit of tether, they will get one dollar in exchange.
Tether, on the other hand, has long been plagued by worries that its token is not fully backed by an equal worth of reserves.
USDT momentarily lost its peg in May when terraUSD, a so-called algorithmic stablecoin, fell to around $0.
Tether said that this was due to volatility in USDT trading rather than its capacity to refund funds to investors.
The quality of Tether's reserves, on the other hand, was of great concern. Previously, the corporation kept a significant amount of its assets in commercial paper, a kind of unsecured, short-term corporate debt.
Fears arose that large investor redemptions would result in a liquidity crisis.
Tether has now said that it has completely removed commercial paper assets from its balance sheet, replacing them with US Treasury notes.
Tether said on Thursday that it has increased its holdings of US government debt to more than 58% of its assets.
Tether announced a $300 million reduction in secured debts on its balance sheet. Between September and December, the corporation had $67 billion in assets and $66 billion in liabilities.
Despite the turmoil of the previous year, Tether's USDT token has maintained its $1 value despite losing over $15 billion in market capitalization since early May.
′′After a turbulent end to 2022, Tether has once again shown its stability, resilience, and capacity to withstand bear markets and black swan occurrences, distinguishing itself from the industry's negative actors, Paolo Ardoino, Tether's chief technical officer, said in a statement Thursday.
Nonetheless, the coin and its issuer continue to be a subject of dispute in the crypto market. According to reports, the US Department of Justice is looking into Tether executives for alleged bank fraud.
Bloomberg reported in October that the Justice Department has created a new team to investigate whether corporate leaders committed a crime after months of delays.
Stablecoin organizations like Tether and Circle have long faced doubts about their capacity to become profitable businesses. Circle abandoned plans to go public via a special purpose acquisition company, or SPAC, in December.
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