Following the many months of intense scrutiny about its finances and whether its tokens are fully backed by USD reserves, Tether has drawn attention to itself again by discreetly altering its terms on its website.
The change now indicates that the Tether (USDT) tokens are backed not just by dollar reserves, but by other assets too:
Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).
Before the change, the terms read:
Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.
Tether has consistently defended itself by saying that its accounts fully support the Tether stablecoin, although many have been suspicious of whether this is indeed the case.
An audit released by the company, described as a “transparency report”, left many investors unconvinced, after it offered no definitive proof that Tether had the funds in its accounts to back the tokens. Investors have desired an independent audit to confirm whether Tether has the funds to back the tokens.
There are currently about 2 billion USDT tokens in circulation.
Despite this, Tether remains one of the more prominent stablecoins.
Speaking to Bitcoin Magazine, a representative from Tether’s sister firm Bitfinex said:
From time to time, Tether reviews its Terms of Service and Risk Disclosures to ensure that they remain appropriate and up to date. Our most recent revisions were intended to update our disclosures to reflect Tether’s growth and operations and to be consistent with the types of disclosures used by other institutions…The only change is that the composition of the assets that provide that backing includes a combination of cash, cash equivalents, and may also include other assets or receivables from loans issued by Tether.
The quiet change in terms only bring further suspicion upon Tether’s finances, especially since the compan y has resisted calls for a formal audit. Most investors do not believe that Tether is fully backed.