Tether, the most controversial stablecoin of all time is trapped in a controversy yet again. This time, Tether is being criticized for silently amending the details of the USDT token and removing the term ‘fully USD backed’ from the details.
Tether Has No Independent Proof of Backing
The details of the token earlier described it as fully backed by USD or United States Dollar by the ratio of 1:1. However, there hasn’t been a time when Tether has published an audited report from an independent auditing firm in order to support the claims of the company. Therefore, it was always criticized by the cryptocurrency community for wrongly claiming to have enough USD to back its supply.
However, now the company has silently removed the term ‘fully USD backed’ from the description of its stablecoin. The new terms seem to describe the token as being backed by other things as well. According to the recent updates on Tether’s official website, each Tether or USDT is backed by their reserves which include traditional currency and cash equivalents, and might also include other assets and receivables from advances made by the company to any third party which may also include an affiliated entity.
Earlier, Tether had released a document from a law firm, Sporkin and Sullivan LLP which agreed to the claims of the company that it holds USD worth the supply of USDT in the ratio of 1:1. However, the documents cannot be 100% trusted as the law firm has also stated an acknowledgment that the firm is a law firm and not an accounting firm, thus they do not follow the accounting terms that are generally accepted.
The company is also planning to release its USDT token on the TRON blockchain and has already been shown support by some of the top cryptocurrency exchanges.