Tether Produces Letter Vouching for Dollar Deposits, But Bank Hedges

Stablecoin issuer Tether Limited confirmed Thursday it was banking with Bahamas-based Deltec Bank and Trust Limited and published a letter purportedly from the institution as evidence of its reserves.

The company, which issues the controversial tether stablecoin, has long been under fire over concerns that it does not have the fiat holdings to fully back the tokens in circulation.

To show proof of its bank balance, Tether released a letter dated November 1 that appeared to come from Deltec, confirming "The portfolio cash value of your account with our bank was US$1,831,322,828" as of October 31.

Further, the letter contained two notable caveats: it was provided "Without liability, however arising, on the part of" the bank, its shareholders, directors, employees or officers; and the letter is "Solely based on the information currently in our possession."

The bank previously declined to confirm any relationship with Tether when reached.

The bank letter is the latest attempt by Tether to reassure the market about its reserves without an audit, which the company has said is not obtainable.

Tether previously tasked a law firm to check on its bank balance.

Earlier, a preliminary report by audit firm Friedman LLP issued in September 2017 indicated that the company had at least $440 million and €1,590 in various bank accounts, fully backing the tokens then in circulation.

The names of the banks were redacted, and Friedman never did a full audit; Tether parted ways with the firm in January.

Tether has notably been removing USDT tokens from circulation over the past month after the stablecoin lost its parity with the dollar.