(Bloomberg) -- Tether Holdings Ltd., the stablecoin issuer that was pulled into the spotlight this week during the confirmation hearing for Donald Trump’s pick to run the Commerce Department, said it made an eye-popping $13 billion in profits last year.
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Howard Lutnick, the president’s nominee, is the head of Cantor Fitzgerald LP, which serves as a key banking partner for the world’s largest issuer of stablecoins. During the hearing, Lutnick disclosed that Cantor Fitzgerald has a convertible bond with Tether, and he said that stablecoins denominated in dollars should be audited.
Closely-held Tether doesn’t release audited financial statements, which has drawn criticism over the years about transparency from crypto market observers and regulators. Instead, the firm releases quarterly information as part of a third-party attestation by BDO.
The $13 billion would conceivably make Tether as or more profitable than Wall Street’s biggest investment banks despite being run by a small group of employees. Goldman Sachs Group Inc. reported net income of $14.3 billion last year on revenue of $53.5 billion.
The attestations are limited to a snapshot in time and do not allow full access to a company’s books. The quality of assets backing stablecoins like Tether’s USDT token has come under intense scrutiny in recent years, as regulators grew concerned about the liquidity of operators’ reserves and if they could withstand mass redemption requests while under market pressure.
The market value of Tether’s USDT token in circulation has climbed to above $143 billion, as demand for stablecoins continued to go up during the crypto bull market. In the three months ended on Dec. 31, Tether said in a statement Friday that it issued more than $23 billion in USDT. The firm also said that it has more than $7 billion in excess reserves.
Stablecoins are a type of cryptocurrency that typically aim to keep a one-to-one value with fiat currencies such as the dollar. They are usually backed by cash and cash equivalents. Tether said it added more exposure to Treasuries in the last quarter, with its total direct and indirect holdings of the Treasuries having reached $113 billion. Most of the reserves backing its stablecoins are deposited in Treasury bills overseen by Cantor, from which Tether earns profits on the interest paid.