Deltec, Tether’s Bahamas-based bank, announced Thursday it was investing customer funds in bitcoin.
The announcement, made by Deltec Bank & Trust Chief Investment Officer Hugo Rogers during a year-in-review video, raises new questions about whether the dollar-pegged USDT stablecoin, which is in theory backed by cash and “cash equivalents,” as well as “other assets and receivables made by loans,” is actually backed in any way by bitcoin.
Twitter user lenne0816 appears to have been the first to surface the video, which was posted online on Jan. 13.
Through a spokesperson, Tether general counsel Stuart Hoegner confirmed that Deltec is still the stablecoin issuer’s bank.
Deltec made headlines in 2018 after Tether published a letter from the bank announcing that it held a little over $1.8 billion, which roughly lined up with the amount of 美元兑美元（-0.05 ％） (USDT, -0.05%)
A Deltec executive later confirmed that the letter, which was unsigned, was authentic.
Read more: Tether Produces Letter Vouching for Dollar Deposits, But Bank Hedges
The next year, the New York Attorney General’s office revealed that Bitfinex, Tether’s sister company through shared ownership and executives, had lost close to $1 billion after its payment processors’ bank accounts were frozen and funds seized. Bitfinex had been covering up the losses by borrowing from Tether’s reserves, which are meant to back the stablecoins it has in circulation.
The companies are currently under an injunction to cease any further loan activities between themselves, though this injunction is set to expire on Jan. 15.
Tether issuance has been on a tear since the injunction was first handed down, and some $25 billion in USDT are currently in circulation. Bitcoin’s price, which some academics and investors allege is buoyed by USDT issuance, has broken new highs, rising past $40,000 per coin as well in recent months.