Controversial stablecoin issuer Tether has relied on an obscure bank in the Bahamas in order to store some of its reserves, according to a recent report published by The Financial Times.
Capital Union, a Nassau-headquartered banking institution, dived into cryptocurrency research last year. Last month, the bank picked prominent blockchain sleuth Chainalysis as its compliance partner in order to ensure compliance and detect risky transactions.
Tether has not confirmed whether or not it has indeed held reserves at the tiny Bahamas bank.
Tether, which has faced plenty of insolvency accusations in the past, remains mum about where it holds its bank deposits.
Last year, the Commodity Futures Trading Commission slapped Tether with a $41 million fine for lying about its stablecoin reserves. It had failed to properly disclose that the flagship stablecoin was partially backed by non-fiat assets.
Earlier this month, the company announced that it had reduced its exposure to risky commercial paper to only 17% while increasing its stake in U.S. government bonds to 13%.
The company’s reserves also include crypto and precious metals, according to its quarterly reports.
Tether is no stranger to criticism, but the stablecoin came under greater scrutiny earlier this month after slightly decoupling from its peg in the aftermath of the Tether collapse. Even though it managed to restore its peg relatively fast, this provided more ammunition for naysayers who accuse the largest cryptocurrency of being insolvent.
The market cap of USDT currently stands at $72 billion.