Lawyers acknowledge that part of Tether’s reserves are supported by Bitcoin
“Before the order on April 24… Tether actually invested in products that exceeded cash and cash equivalents, including bitcoin, and they bought bitcoin,” said David Miller, a lawyer at Bitfinex.
Miller believes that the court clearly wants to limit Tether's investment to cash beyond its jurisdiction, however, users who rely on Tether to protect the value of their assets may not be happy to find themselves in such an unstable state.
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New York Supreme Court Justice Joel M. Cohen noticed this and said: "Tether is like a calm in the cryptocurrency trading storm for me."
“If Tether gets Bitcoin support, what is the consistency? If some of your assets are in a volatile currency, and Tether should be adjusted in some way”
This is a series of unpleasant news about the relationship between the two companies whose business has been kept secret for many years.
The case is in progress
Although Tether's users have long suspected that Tether had problems dealing with its reserves, it was discovered in April that Tether used a $850 million reserve to provide loans to Bitfinex, and Bitfinex might go bankrupt without a loan. The news was sent by the Attorney General of New York.
Although Bitfinex's CEO, Jean Louis van der Velde, responded to the lawsuit, saying it was "full of inaccuracies and false claims," the lawsuit finally revealed that only 74% of Tether reserves Supported by actual cash.
Before the lawsuit, Tether changed the wording of its user policy in February, saying that it was not all supported by legal currency. As before, the official website regulations changed to Tether's support for “traditional currency and cash equivalents” and “other assets and receivables for loans”, rather than saying that Tether Dollars was supported by “traditional currency”.
At the same time, Bitfinex said its own fundraising has been successful – with the goal of raising $1 billion. The token LEO sold in sales began trading on Bitfinex on Monday and is currently worth $1.04. (chain to finance)
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