tether admits to lending reserves to third partiesThe latest spark of discussion is the recently updated Tether website that now claims that the currency is still backed by the United States dollar (USD). Which means that one USDT can be valued at one physical US dollar; however, the reserves company uses for the value have been loaned out to other financial institutions.
The beauty of cryptocurrency and blockchain realm lies in the fact that what happens here is taken to social media, especially Twitter and Reddit. This is where the issue sparked again when a Twitter user brought the new website statement to light.
Tether website has always claimed that the company holds the reserves to back each Tether with a dollar however that statement has been changed to the new one.
The new statement on the website explains that “from time to time,” change the reserves as they please into loan receivables and “other assets.” The stablecoin company then continues to reassure users that regardless of the state of reserves each Tether would continue to be valued at one United States dollar.
The news is only hitting the social media. However, Tether claims that the change was made public several weeks ago and users were prompted upon successfully logging on the platform. The official explained that Tether made no attempt to hide the changes in the “Risk Disclosures.”
He further explained that the currency continues to be a stablecoin with the same stability and value reserves and only the “composition of assets” backing the token has been changed to better suit the financial policy of the firm.
Users believe that Tether has been forced by the legal proceedings where the firm has time and again failed to come up with the bank statements proving their claim of available reserves for each Tether token issued since 2014.
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