Tether Reports $850M Profit In Second Quarter

Tether Holdings Limited, the company that issues USDT, crypto’s largest stablecoin with a market capitalization of $83.8B, reported $850M in second-quarter profits on July 31.

Most of Tether’s profits come from its Treasury bills, said the company’s CTO, Paolo Ardoino. Treasury bills make up roughly 64% of Tether’s assets.

The profits comprise part of the $86.5B in reserve assets which back USDT, according to an attestation by BDO Italia, a subsidiary of the multinational BDO accounting firm.

Money Printer

For comparison, no blockchain-native project generates as much profit as Tether does — Ethereum, which generates more fees than any project in crypto, did $780M in fees in the last 90 days, according to Token Terminal, a data provider.

Tether has had an extremely strong year — the circulating supply of the stablecoin is up 27% to $83.8B from $66.2B on January 1. Meanwhile, Circle’s USDC, its largest rival, has collapsed 40% to 26.5B from 44.5B after briefly depegging in March.

With its business continuing to be profitable, Tether is looking like a major winner of the ongoing bear market as the company takes advantage of rising U.S. interest rates, which are at 22-year highs.

Tether reported a $1.5B profit for Q1 in May.

Despite the positive numbers, however, some observers continue to doubt the attestations’ legitimacy.

Dwindling Cash Reserves

The company’s cash balances have decreased substantially over the past year. Cash holdings have fallen from $5.3B in 2022’s Q4 report to $481M in 2023’s Q1 report, to $91M in the latest one.

The pseudonymous Not Tiger Global, an ardent critic of Tether, suggested that the organization was getting “de-banked,” on X. They also emphasized that attestations are a less strict measure of a company’s financial health than a formal audit.

Tether isn’t unfamiliar with doubts over its books — the organization has repeatedly disputed articles by the Wall Street Journal alleging that it used falsified documents to access bank accounts and that Tether didn’t follow through on its stated commitment to undertake a formal audit.

Tether paid $41M in 2021 as part of a lawsuit brought by the Commodities, Futures and Trading Commission (CFTC) “for making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin.”

Still, Tether appears to be rolling on — other developments revealed in Tether’s Q2 attestation include a $115M share buyback and energy-related investments. Ardoino provided more detail on X saying that the company is investing in “renewable energy production facilities.”