Deltec, the bank for stablecoin issuer Tether, bought 'large position' in Bitcoin for clients

advertisement

Deltec, the Bahamas-based bank that holds the reserves for stablecoin giant Tether, holds a "large position in bitcoin" according to its chief investment officer.

CIO Hugo Rogers disclosed the investment during a year-in-review video published on January 14. Specifically, the comments about the bitcoin position were in the context of a question about Deltec's "high level calls and best picks" for the year.

After discussing Deltec's bond holdings, Rogers said:

“We’ve maintained a very significant position in the beneficiaries of maximum monetization, so that does include gold, it includes other commodities as well. It also includes a large position in bitcoin, which has received a lot of attention recently. We bought bitcoin for our clients at about $9,300 so that worked very well through 2020 and we expect it to work well in 2021 as the printing presses continue to run hot."

The timing of the purchase isn't clear at this time. Market data from Coinbase shows that bitcoin's price last traded at that level in mid-July.

After the publication of this story, Tether told The Block in a statement on Friday that it "does not outsource decisions about its reserves," and "Deltec does not purchase digital tokens for and on Tether's behalf."

The Block reported in October 2018 that Tether had begun holding its reserves with Deltec, having previously worked with Puerto Rico-based Noble Bank. A letter published by Tether in November 2018 attesting to its relationship with Deltec was later confirmed by the bank.

Tether's banking problems began in mid-2017, when Wells Fargo — through which Tether had been processing U.S. dollar transactions — moved to block such activities, triggering a lawsuit that was soon withdrawn.

Tether is the subject of an ongoing inquiry by the New York State Attorney into iFinex, the parent company of both Tether and crypto exchange Bitfinex. The investigation broke into public view in April 2019. Last July, the AG's office prevailed in an appeal related to document production for its investigation. On December 9, the AG's office told a New York Supreme Court judge that iFinex has been cooperating with the document production, with a requested deadline extension to January 15.

Tether has long been the subject of public controversy and accusations of fraud, driven by the contention that USDT isn't fully back by reserves and is used to manipulate cryptocurrency prices. 

In the period since the commencement of the NYAG's lawsuit, Tether's footprint has continued to grow, both in terms of the number of blockchains supporting USDT as well as the total amount of the stablecoin in circulation.

According to data collected by The Block, there is more than 25 billion USDT in circulation today.

Hat tip @Lenne0826/Twitter

Correction: This report has been updated to correct the quote transcription. Rogers said "printing presses", not "liquidity crisis."

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

TRON USDC now available

Delivering on a vision for an interoperable global standard for dollar digital currency, Circle and TRON have partnered to make USD Coin (USDC) available on the TRON blockchain, which has grown to more than 56 million accounts and nearly 2.5 billion transactions since its founding just four years ago. TRON is home to a broad ecosystem for digital assets in Asia and around the world, and the TRON community can now benefit from easy access to the world's fastest-growing, regulated dollar digital currency. 
Read Full Story
Sponsored Post

Layer-1 Platforms: A Framework for Comparison

The Block Research was commissioned by Algorand to create Layer-1 Platforms: A Framework for comparison, which provides a “look under the hood” at seven platforms: Algorand, Avalanche, Binance Smart Chain, Cosmos, Ethereum/Ethereum 2.0, Polkadot, and Solana. We assess their technical design, related ecosystem data, and qualitative factors such as key ecosystem members to get an understanding of how they differ. Having done this analysis, we draw some insights for what the future of the broader smart contract landscape could look like for years to come. 
Read Full Story
Aug 11, 2021, 5:18PM UTC
More