BitMEX Says Puerto Rico’s Noble Bank is Tether’s Primary Reserve Bank
Controversial cryptocurrency startup Tether continues to remain in news over the use of its USDT tokens. This time the Bitcoin Mercantile Exchange - BitMEX in its research has released evidence supporting its previous claims that Puerto Rico’s Noble Bank is the primary reserve bank storing all the Tether assets.
A few weeks back, BitMEX had published a research piece showing Tether having some extended links to Puerto Rico. Having analyzed the public financial data, the mercantile exchange discovered a strong growth in the bank deposits in the International Financial Entities (IFE) category, which includes Noble Bank.
However, till now, the researchers were not able to draw a strong conclusion even though after checking out the unusual balance sheet structure. But later, the Commissioner of Financial Institutions of Puerto Rico released the data of aggregate financial system for the year of 2017, which shows a whopping 248% growth in bank deposits, which amounts to $3.3 billion, in Q4 2017 in the IFE category. The total assets in the category were worth $3.8 billion, a 161% jump in the same quarter.
BitMEX draws a strong link between the exemplary growth in the bank deposits vis-a-vis the increase in the value of crypto assets during the same period. This activity ultimately resulted in large cash inflows in the digital currency-related banks.
Moreover, there are only two banks in Puerto Rico that fall under the IFE category and out of these two, the San Juan-based Noble Bank is said to have good relationships with crypto-related firms. It has also been discovered that Tether co-founder Brock Pierce has a professional relationship with Noble Bank’s founder and CEO, John Betts.
If Noble Bank actually turns of to be Tether’s primary reserve bank that it will be a significant development as it will prove that Tether is not a Ponzi scheme and that its assets have been actually backed by USD.
Currently, Tether is second most liquid digital asset after Bitcoin having an average daily volume of $2.83 billion. Tether is basically a USD pegged cryptocurrency meaning each Tether USDT coin is worth $1.Tether is largely used by cryptocurrency exchanges as it makes conversion each from Tether to other digital currencies instead of exchanging them with fiat currencies.
Recently, the cryptocurrency has been under increased scrutiny after its alleged relations with Bitfinex exchange which is said to have used Tether tokens to manipulate the price of Bitcoin. Moreover, the suspicion started growing within investors when Tether dissolved its relationship with audit firm Freidman LLP, earlier this year.