Tether’s Unprecedented $11.6B Mortgage Loan Surges in Two Years 


Key Takeaways:

Tether granted $11.6 billion in mortgage loans between June 2019 and May 2021.

The filings also show that Tether repaid a $8 billion debt throughout the time period.

In the world of cryptocurrency, Tether (USDT) has emerged as one of the most widely used stablecoins, providing stability and liquidity to traders and investors. However, recent revelations about Tether’s involvement in a staggering $11.6 billion surge in mortgage loans over a span of just two years have sent shockwaves through the industry. 

According to recent reports, Tether, the issuer of the USDT stablecoin, has experienced an astounding surge in mortgage loans, totaling a whopping $11.6 billion within a short two-year timeframe. 

These loans are believed to have been primarily obtained by Tether through various financial institutions and mortgage lenders.

The document states that 89% of the 694 loans have Bitcoin as collateral, while 9% have Ethereum . Tether Gold (XAUT) and additional securities are used as security for the remaining 2%. 

A total of 450,000 Bitcoin and 1.1 million Ethereum were given to the USDT issuer as collateral. The records also demonstrate that Tether paid back a $8 billion debt during that time.

In December 2022, Tether made an announcement stating its intention to eliminate collateralized and over-collateralized loans from its reserves entirely by 2023. This decision came after Tether and its affiliated company, Bitfinex, reached a settlement with the New York Attorney General’s Office (NYAG), putting an end to a legal dispute that had been ongoing since mid-2019.

Tether issued $11.6 billion in mortgages between June 2019 and May 2021, the latest filings show. 89% of them are backed by BTC. A old story about How Tether saved its borrower Babel Finance, a Chinese lending company in March 12, 2021. Read more: https://t.co/MvMUFN71xH pic.twitter.com/nbGH7haTRR — Wu Blockchain (@WuBlockchain) June 17, 2023

As part of the settlement reached in 2021, Tether committed to fulfilling its reporting obligations to the NYAG. These obligations required Tether to report on the status of its reserves every quarter for a period of two years. 

Earlier this year, Tether successfully fulfilled these reporting requirements, providing the necessary information to the NYAG as stipulated in the settlement agreement.

This loan issuance by Tether has sparked concerns regarding the transparency and stability of the company’s operations. Detractors argue that such loans have the potential to introduce substantial risks to the cryptocurrency market by blurring the distinction between Tether’s fiat currency reserves and its digital assets.

Tether acknowledged its prior involvement in lending operations in response to the disclosure of the records, highlighting the excessive collateralization of these loans. Additionally, Tether has previously stated that by the end of 2023, it planned to gradually pay off all secured and overcollateralized debts.

In recent times, Tether has found itself embroiled in a storm of controversy and scrutiny regarding its transparency procedures. Just a few days back Tether had to also Address Reports on Chinese Securities Exposure.

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