Tether Relied on an Obscure Bank in the Bahamas to Store its Reserves

The Financial Times recently published a report on Tether’s dependency on an obscure bank in the Bahamas in order to store some of its reserves.

Capital Union, a Nassau-headquartered banking institution, was divided into virtual assets research last year, whereas just a month ago the bank picked prominent blockchain sleuth Chain analysis as its compliance partner to ensure compliance and detect risky transactions over cryptocurrency. 

The controversial stablecoin Tether has not yet confirmed its holdings at the tiny Bahamas bank, as it has faced plenty of criticism in the past choosing to remain mum on its holdings at bank deposits. 

The Commodity Futures Trading Commission last year penalized Tether with a $41 million fine for lying about its stablecoin reserves. On which the Tether had failed to disclose its non-fiat assets. 

In addition to this, the company had announced its reduction in exposure to risky commercial paper to only 17%, and increased its stake in U.S government bonds to 13%. According to the company’s quarterly report, the company reserves also include crypto and precious metals. 

Thus the controversial stablecoin can no longer hold the criticism, but the stablecoin fell under greater scrutiny earlier this month after decoupling its peg slightly. Even with the faster recovery to manage its peg, naysayers accuse the largest crypto of being insolvent. The market cap of USDT is currently standing at $72 billion.