Tether issued $11.6 billion of loans between 2019 and May 2021

Quick Take

  • Tether issued $11.6 billion of collateralized loans between June 2019 and May 2021.
  • The stablecoin issuer said it was winding down its lending operations during 2023.

Stablecoin issuer Tether issued $11.6 billion of collateralized loans between June 2019 and May 2021, according to documents released this week by the New York Attorney General that relate to a legal settlement.

Out of the 694 loans, 89% of the total amount of loans was issued against bitcoin as collateral, while 9% had ether as collateral. The remaining 2% was split between Tether Gold (XAUT) and unnamed securities. Tether received a cumulative total of 450,000 BTC in collateral and 1.1 million ETH.

The documents also show that $8 billion of loans were repaid during that period.

"Tether has historically engaged in lending transactions – disclosed in our independent, third party assurance attestations – to a select group of larger Tether customers," Tether said in a statement earlier today. It noted that the loans were overcollateralized.

Tether reduces loans

In December 2022, Tether said it was reducing secured and overcollateralized loans in its reserves to zero during the course of 2023. "Tether is professionally and conservatively managed and this will be demonstrated once again by successfully winding down the lending business without losses (since all loans are over-collateralized by liquid assets)," it said at the time.

The documents were gathered by the NYAG in its investigation into Tether, which resulted in a February 2021 settlement and an $18.5 million fine. They were released after a freedom of information request made by crypto publication CoinDesk, and the Attorney General's office made them available to The Block. 

Tether did not immediately respond to a request for comment.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.