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NYAG releases document detailing Tether's exposure to Chinese securities in 2021
The NYAG released the documents pursuant to a Freedom of Information Act (FOIL) request filed by CoinDesk after Tether dropped its objection to the requests.
Documents provided to the New York attorney general's office as part of Tether's 2021 settlement show that the company held Chinese securities backing its stablecoin USDT in reserves at the time.
The NYAG released the documents on June 15 in response to a Freedom of Information Act (FOIL) request from CoinDesk after Tether dropped its objection to the requests.
The documents include letters, bank accounts, reserve assets and wallet addresses, as well as methods Tether uses to detect money laundering.
They also detailed the status of the assets as of March 31, 2021.
As part of Tether's 2021 settlement with the NYAG, the company was required to report its reserves quarterly for two years -- an obligation that ended on June 15.
As of June 15th, Tether has officially completed its two-year obligation.
Tether said it initially blocked the FOIL request due to concerns about private customer data, but withdrew the appeal in order to make the crypto community more transparent.
However, it urged the media to exercise caution and avoid divulging sensitive information such as customer details. The company also published an in-depth blog addressing many of the points raised in the media and the reasons for certain decisions in the past.
China Exposure
According to the filing, Tether holds securities issued by major Chinese state-owned entities, including Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China.
Tether also holds securities issued by major European banks such as Deutsche Bank and Barclays.
Most of the Chinese securities mature in 2020 and 2021, the documents show.
Tether said in its blog post that its holdings of Chinese commercial paper are mainly issued by banks, and the documents confirm this. The firm also said that holding such securities is common practice even among some of the largest investment managers in the world.
Since then, Tether said it has steadily reduced its overall commercial paper exposure to zero and no longer holds any Chinese securities in USDT reserves.