Tether Reports Record Profits In Its Q1 Attestation, Reveals BTC And Gold Holdings

Tether claimed record net profits and all-time high surplus in its assertation

Key Takeaways:

Tether reported record net profits and reserve surpluses in its Q1 attestation.
The stablecoin revealed its Bitcoin and gold holdings for the first time

NEW DELHI (CoinChapter.com) — Tether Holdings, the firm behind the largest stablecoin by market cap USDT, had an excellent first quarter in 2023, posting record net profits. The report came when the USDT market cap reached an all-time high on May 14.

Tether stated in its attestation that the stablecoin issuer recorded a net profit of $1.48 billion in Q1 2023. The profits more than doubled from Tether’s Q1 performance in 2022, when Tether posted gains of $700 million.

Moreover, the profits added to its reserve surplus, propelling it to an all-time high of $2.44 billion.

Furthermore, Tether closed Q1 with more than $81.8 billion in consolidated total assets. The firm also noted that most of its reserves remained extremely liquid. Liquidity shortages became a bane for several crypto firms when the market turned bearish in 2022.

In addition, Tether claimed to be working to reduce its reliance on banks as a source of liquidity. The USDT issuer is leveraging the repo market to reduce counterparty risks. Tether increased its exposure to US treasury bills while winding down investments in secured loans by almost 25%.

Tether Reveals Bitcoin And Gold Holdings For The First Time

Meanwhile, Tether revealed its Bitcoin and Gold holdings for the first time to foster transparency in the system.

The assertion reports highlights Tether’s increased allocation towards the US Treasury Bills, with the asset category accounting for over $53 billion. In addition, overnight reverse repo agreements saw $7.5 billion of Tether’s allocation, while money market funds had the third highest allocation at $7.45 billion.

Tether’s Q1 assertation report detailing various assets held by the firm.

Furthermore, as of March 31, Tether held over $1.5 billion worth of BTC in its coffers, the digital asset accounting for nearly 2% of its total reserves. Nearly $3.4 billion of Tether’s reserves are in the form of “LBMA standard physical gold bars.“

Tether a “Crypto Counterfeiter,” Says Former SEC Lawyer

However, despite the independent assurance opinion by BDO Italia, John Reed Stark, a former SEC enforcement attorney, slammed the stablecoin as a ‘crypto counterfeiter‘ and a ‘house of cards.’

Also Read: Litecoin Price Rises 15% in a Week As LTC-20 Fuels Network Activity

Stark slammed the attestation as misleading, instead demanding an audit of the firm.

Audits are methodically designed to look for potential risks, while attestations only evaluate whether the data being examined by the “attestator” is accurate at that precise moment in time. Hence, any iteration of attestation is pretty useless, especially as a matter of due diligence.
Stark said in a tweet

The post sparked a debate between the former SEC official and Tether’s CTO, Paolo Ardoino. Stark put the issue to rest on May 13 tweet, calling the Twitter battle a “terrific and civil exchange of ideas.”

Though Stark acknowledged several of Ardoino’s points, the former SEC attorney was quick to claim that anyone using Tether was “at risk.“