In recent weeks, more than half of all bitcoin trades took place against Tether. Yet few knew for certain if there were dollars backing those tokens. This week, Tether released a letter from its bank, Bahamas-based Deltec, saying, “We hereby confirm that, at the close of business on October 31, 2018, the portfolio cash value of your account with our bank was US$1,831,322,828.” That amount was nearly $55 million above the amount of Tether tokens in circulation. Over and done with, right? Not exactly. Crypto Twitter talmudicly began parsing the letter, particularly the second part, which reads: “This letter is provided without any liability, however arising, on the part of…
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Fake Tethers under fake bitcoins. It's an illustration of what may be happening (Photo via Shutterstock).Why did $100 million in tethers disappear?
Some suspect the trail leads to the Bahamas
On Tuesday morning, the circulating supply of Tether’s token dropped to roughly 2.7 billion from 2.8 billion. An obscure Reddit post may give some clues as to what happened. This marks the first serious drop in supply in since mid-July, when some 300 million tether were taken out of the market but by mid-August, around 400 million were added back. Each “tether” is allegedly backed by one dollar; thus the token trades at par with the U.S. dollar. The decrease in supply is increasing speculation that Tether is using Deltec Bank, based in The Bahamas, as the storage place for their U.S. dollar assets. Tether had been using Puerto Rico’s…