Tether, the infamous stablecoin issuer, mentioned that it had invested some of its reserves in bitcoin and other assets, as per a court filing obtained by crypto media outlet the Block on May 21.
According to the document dated May 16, David Miller, an attorney for Tether’s associated firm Bitfinex, mentioned that Tether invested some amount of Tether’s reserves into BTC. He further specified that before the April 24th order, Tether in point of fact did invest in instruments further than cash and cash equivalents, including BTC, they bought bitcoin. Miller additionally mentioned that Tether made supplementary investments, including buying other assets.
New York Supreme Court Judge Joel M. Cohen, in response to Miller’s statement, doubted the reason for investing a stable coin in a very volatile digital asset like bitcoin.
According to the previous reports, the New York Attorney General’s office suspected that cryptocurrency and digital asset exchange Bitfinex lost $850 million and subsequently used funds from Tether to clandestinely cover up the deficit. It is to be noted that lawyers from Tether confirmed preexisting speculations that its tokens did not have full reserve backing. Additionally, they allegedly mentioned that only seventy-four percent of the tokens are backed by fiat dollars and other reserves.
New York Attorney General, Letitia James further requested the disclosure of documents regarding a suspected deal made between the 2 companies. The New York Supreme Court judge Joel M. Cohen decided, following the request, that the parties should attempt to resolve their disagreement and submit a refined argument, claiming that the New York Attorney General cannot bring the full force of its court order against Tether and Bitfinex.