Bloomberg launched a scathing attack on the issuer of the digital stablecoin Tether (USDT) in an October 7 Businessweek article titled:

Is there anyone who sees the Tether billions?

pointed out Financial news giant Bloomberg claims that the USDT stablecoin is essentially a scam because it does not own the assets that support it.

Currently, at the time of writing this article, there are 69 billion USDT in circulation, according to to report Tether Transparency.

Quoting from a Bloomberg article:

Tether Holdings doesn’t have enough assets to keep the exchange rate from 1 to 1, which means its digital currency is basically a scam.

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As if she was sprinkling salt in the wound, Bloomberg continued with another article released today, October 8, highlighting the main points from the previous article.

The new article claims that part of the Tether reserve includes billions of dollars in short-term loans to large Chinese companies.

She added that some of the loans are backed by cryptocurrency, which has already been confirmed by Tether.

The Bloomberg report cited Giancarlo Devasini, Tether’s chief financial officer, quoting John Bates, the former CEO of Noble Bank, as saying Devasini had invested some reserves to earn hundreds of millions of dollars in profits for himself.

Bloomberg also repeated old reports that Tether executives were targets of a criminal investigation into bank fraud by the US Department of Justice.

Tether’s response:

Tether posted in response to the scathing reports on October 7:

A one-act play that the industry has seen many times before, in which snippets of old news from various places and questionable sources are taken and made to fit a predetermined narrative.

Tether added that Bloomberg refused to let the facts get in the way of the story and relied on John Bates, who had been fired by Tether as its banker.

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Tether, for its part, pointed the finger at “Bates” on the other hand:

Bates was accused of engaging in scandalous and wasteful self-dealing and seeking to enrich himself at Nobel’s expense.

When is the audit?

Tether confirms that all of its cryptocurrencies are fully backed but has yet to provide a full review of its reserves.

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According to a May court filing, USDT reserves are dollar-weighted and include cash, bonds, secured loans, crypto assets and other investments.

In late July, Tether’s general counsel, Stuart Hoegner, said the company hopes to be the first to conduct a full audit in a matter of months, not years.

While Tether attempts to present its reserve tally, US regulators continue to put pressure on stablecoins with the same onerous allegations threatening the traditional financial system.

Essentially, this was their goal, which Tether seeks to refute.

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