New Evidence Suggests Tether Does Not Have the Dollar Reserves It Claims

Based on CryptoSlate's investigation below, there is little evidence to suggest that Tether has the U.S. dollar reserves it claims in its bank in the Bahamas.

In one estimate, at least 30 percent of all Bitcoin transactions that take place on exchanges use USDT. Yet, as shown below, based on statements from the Bahamian Central Bank there is no evidence to suggest that the Bahamian banking system received any large cash or cash equivalent deposits, in either foreign deposits, native Bahamian dollars, or in foreign currency deposits held on behalf of another bank outside of the Bahamas-from Tether Ltd., or any other corporate entity.

According to reports from Bloomberg, the bank has not confirmed or denied its relationship with Tether Ltd.Background on Previous Banking Relationships.

In 2017, Wells Fargo terminated its relationship with correspondent banks in Taiwan because of the Taiwanese banks' dealings with Tether.

Although banks are typically risk-averse, especially when dealing with cryptocurrency companies, it appears that Tether and Bitfinex have had an unusually difficult time securing a reliable banking partner.

All foreign deposits and instruments in these reports are converted into their respective amounts in BSD. An advantage of the Bahamas is that the island's banking system is small enough to gain meaningful insight into Tether by scrutinizing these reports.

To further emphasize the low likelihood of a large cash transfer, the Bahamian Central Bank has strict reserve requirements between foreign currencies and the BSD:. "Upon establishment, the Central Bank was given a statutory mandate to ensure that external reserves are maintained at 50% of the value of total notes and coins in circulation and demand liabilities of the Bank; and for the most part, external reserves have been maintained comfortably above this statutory minimum."

As mentioned in the prior section, it's possible that Tether is exchanging its USD for BSD to deposit into the Bahamian banking system.

If Tether made BSD purchases over the course of the year, which is again unlikely given the timeframe, it is possible that Tether is gradually converting its USD to BSD. That said, there is no evidence that those BSD are getting deposited elsewhere in the Bahamian banking system.

So long as Deltec is unwilling to confirm its relationship with Tether, it will be impossible to verify that Tether has a relationship with the bank at all.