With all of the controversies surrounding Tether’s balance sheet and the bearish outlook in the crypto market in 2022, the stablecoin issuer still recorded a huge profit of about $700 million in the fourth quarter. It is noteworthy that the USDT issuer thrived and survived in Q4 when the harsh market conditions intensified due to the liquidity crunch of FTX.
Based on a published attestation statement, this profit margin is a significant increase to Tether’s reserve.
At the time when it announced its $700 million profit, its consolidated total assets were around $67.04 billion while the consolidated total liabilities were at least $66.08 billion. These figures indicate that there is a surplus reserve of $960 million. Also, its secured loan has been reduced to $300 million.
Many had feared that if Tether crashed, the whole crypto industry would be doomed. This uncertainty then heightened when Wall Street Journal published a report last year insisting that a further 0.3% fall in assets would mean the stablecoin issuer is technically insolvent.
Tether Remains Highly Solvent
As per the blog post made by the issuer of the largest stablecoin,
“Tether’s reserves remain extremely liquid, with the majority of its investments being held in cash, cash equivalents, and other short-term deposits. This latest report demonstrates its commitment to transparency.”
“With the presentation of this latest consolidated reserve report, Tether continues to deliver on our promise to lead the industry in transparency,” Paolo Ardoino, Chief Technology Officer (CTO) of Tether analysed. “After a tumultuous end to 2022, Tether has once again proven its stability, its resilience and its ability to handle bear markets and black swan events, setting itself apart from the bad actors of the industry,” probably referring to TerraForm Labs and FTX which had been investigated for several misconducts.
The FTX troubles eventually contributed to the resignation of Sam Bankman-Fried as the Chief Executive Officer (CEO). He was arrested in the Bahamas and later extradited to the United States. SBF was issued a $250 million bail bond by the U.S. court although his travel documents were seized while he remained under house arrest.
He was only allowed out of his parent’s California residence to exercise or for medical appointments.
