Stablecoin company Tether plans to reduce the size of its secured loans in its reserves to zero next year after the WSJ reported that the company held $6.1 billion of the loans in its balance sheet.

Tether, the issuer of the popular stablecoin of USDT, has stated that it plans to reduce secured loans on its reserves to zero throughout next year. The company acknowledged that the events of the last few months in the crypto markets have shaken the industry, and there was a need ‘to restore faith in the market.’

The team at Tether further pointed out that the company and USDT have been resilient in the last eight years and during some of the most tumultuous market conditions.

‘Unlike countless parties that have gone bankrupt or are facing bankruptcy risks on the back of widespread fraud, leverage and bad risk management, Tether has prioritised transparency, accountability and operational excellence above all else,’ the company explained.

Tether Had Not Disclosed Loans it Issues in USDT — Wall Street Journal

The announcement by Tether regarding plans to reduce the amount of secured loans on its reserves to zero comes two weeks after the Wall Street Journal (WSJ) reported that the company ‘has increasingly been lending its own coins to customers rather than selling them for hard currency upfront.’

The WSJ report added that the loans had appeared for several quarters in its financial reports, with the most recent indicating $6.1 billion as of September 30th, 2022. Similar loans had reached $4.1 billion at the end of 2021.

In addition, the WSJ observed that Tether calls them ‘secured loans’ with little information regarding its borrowers and the assets posted as collateral. However, the Tether team told the WSJ that the loans were short-term and that borrowers posted lots of ‘extremely liquid’ collateral that could be sold immediately should they default.

Tether Truthers Keep Fabricating Stories — Tether

The Tether team have also responded to the WSJ claims, stating that such stories are ‘fabrications and disinformation concocted by Tether Truthers and clickbait headlines from mainstream media that have been consistently wrong about Tether, for close to a decade.’

Furthermore, Tether stated that it would continue to focus on the crypto industry despite the amount of FUD thrown its way.

‘No matter what Tether FUD sceptics and journalists throw at us, we will continue to focus on emerging markets, financial freedom and demonstrate the deep care for our community that have made us the most trusted (and most used) stablecoin by people worldwide,’ said the team at Tether. ‘Just don’t expect Tether to ever become a sock puppet for Wall Street — especially as our competitors are doing a fine job filling that role.’

~By John P. Njui~