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Generally beleaguered throughout 2022, Tether has managed to improve its financial situation drastically and top it all with a $700 million Q4 net profit.
Commercial paper backing
FUD upon FUD (fear, uncertainty, doubt) has been heaped upon the company behind the Tether USDT stablecoin for quite some time now, and much was made of the ‘dubious’ backing of the US dollar-pegged token. A large part of which was commercial paper.
However, the improved finances have allowed Tether to get the commercial paper off of its books. It had given itself a target of doing this by the end of 2022 and an attestation report, provided by top-5 accounting firm BDO Italia at the end of December 2022, confirmed this.
The report vouched for the integrity of Tether’s own Consolidated Reserves Report, stating that there was no longer any commercial paper backing, that it had $67 billion in consolidated assets, and that it held excess reserves of at least $960 million.
Tether's financial resurgence
In a statement on the company website Paolo Arduino, CTO of Tether, said of his company’s progress:
“After a tumultuous end to 2022, Tether has once again proven its stability, its resilience and its ability to handle bear markets and black swan events, setting itself apart from the bad actors of the industry. Not only were we able to smoothly execute over $21 billion dollars in redemptions during the chaotic events of the year, but Tether has on the other side issued over $10 billion of USDâ®, an indication of continued organic growth and adoption of Tether.”
“Last quarter, Tether generated over $700 million in profits, adding to its reserves. We are proud of how Tether has continued to be a driving force in rebuilding trust within the crypto industry and we are determined to continue to set a positive example for our peers and competitors alike.”
Still a question mark?
The only real question mark against Tether’s financial situation is that a third-party attestation is only really a snapshot at a particular time. It is not to be confused with a full financial audit which would allow full and unrestricted access to Tether’s books.
It is likely that until such time that Tether does undergo such an audit, the suspicions of some detractors will remain.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.