Tether (USDT) Reports a"record" $5.2 Billion of Net Profits in the First Half of the Year

The company said it generated $1.3 billion of net operating profits over the second quarter of the year. A part of those profits were reinvested in"strategic projects"

Stablecoin issuer Tether has disclosed its latest financials, revealing a "record" $5.2 billion of net profits in the first half of the year as the market cap of its flagship cryptocurrency continues to slide.

The company said it generated $1.3 billion of net operating profits over the second quarter of the year. A part of those profits were reinvested in "strategic projects."

Signed by accounting firm BDO Italy, the company's stablecoin issuer arm Tether International Limited and Tether Limited disclosed $118.4 billion of assets in reserve against $113.1 billion in liabilities as of June 30. This translated to $5.3 billion of excess reserves backing Tether's stablecoins.

Its U.S. debt holdings amounted to $97.6 billion, which would rank as the 18th among countries – surpassing Germany, the United Arab Emirates and Australia, the company said.

Tether Investments, the entity established as a separate division from the stablecoin business to manage the company's growing foray into bitcoin, had total digital asset holdings – including bitcoin – valued at $5.8 billion as of June 30. The company's bitcoin holdings now stand at 10.8% of its total reserves.

Tether's USDT is a key piece of infrastructure in the crypto market for trading and is increasingly in demand in developing countries as a vehicle to access the U.S. dollars.

Tether has received considerable scrutiny over the years for the perceived opaqueness of its reserves. A recent class-action lawsuit against the company alleges that Tether executives misled investors by falsely claiming its stablecoin was fully backed by cash and cash equivalents at all times.

The company has shifted its reserves toward digital assets and other "progressive" instruments, with its cash and cash equivalent reserves now down to 22.2% of the total. This compares with digital asset holdings, which now stand at 51.1% of the company's total reserves.

Howard Lutnick, chairman and CEO of the Wall Street investment bank Cantor Fitzgerald that manages a part of Tether's assets, said in a statement that the company's "record" profits were driven by its "unwavering commitment to transparency and regulatory compliance."

"We are pleased to announce that Tether's reserves now exceed $118 billion, with over $97 billion in U.S. debt holdings alone,” Lutnick said. “This places Tether among the top 18 countries in the world in terms of debt holdings, surpassing Germany, the United Arab Emirates and Australia.”

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