According to a recent report, controversial stablecoin issuer Tether has relied on an unknown bank in the Bahamas to deposit part of its reserves.
Capital Union, a Nassau-based financial company, began investigating cryptocurrency last year. In order to ensure compliance and detect risky transactions, the bank hired prominent blockchain sleuth Chainalysis as its compliance partner last month.
Tether has not confirmed whether it has kept reserves at the small Bahamas bank.
Tether, which has faced several bankruptcy accusations in the past, has remained silent on where it keeps its bank deposits.
Tether was fined $41 million by the Commodity Futures Trading Commission last year for misrepresenting its stablecoin reserves. It had failed to disclose properly that the flagship stablecoin was partially backed by non-fiat assets.
The company reported earlier this month that it had decreased its exposure to risky commercial paper to 17% while boosting its investment in US government bonds to 13%.
According to quarterly filings, the company’s reserves also contain cryptocurrency and precious metals.
