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  • Tether holds $2.1b in cash and cash equivalents.
  • $850m cover-up was done to shield the crypto market.

The Tether-Bitfinex saga has yet another twist in the tale as news came out that only 74% of the coins are backed by fiat currency. This news comes out less than a week after it was revealed that Bitfinex had lost $850m and covered the whole thing up by taking $900m from Tether’s cash reserves.

Tether’s general counsel Stuart Hoegner wrote in his affidavit that the firm only holds $2.1b in cash and cash equivalents. However, this contradicts CoinMarketCap which puts the circulating supply of Tether at >$2.8b. The remaining 26% of Tether is not pegged to any of the assets and the official website had earlier removed the line “‘backed 1-to-1 by traditional currency,” back in March. Hoegner states:

“As of the date [April 30] I am signing this affidavit, Tether has cash and cash equivalents (short term securities) on hand totaling approximately $2.1 billion, representing approximately 74 percent of the current outstanding tethers.”

Hoegner also said that the $850m cover-up by Bitfinex was done to shield the crypto market from a potential bear run. Since Bitfinex is one of the biggest crypto exchanges out there, its problems could’ve negatively impacted the market. Hoegner added:

“Tether, and holders of tether, have a keen interest in ensuring that one of the dominant trading platforms of tethers has sufficient liquidity for normal operations.”