Tether counsel said liquid reserves covered 74% of outstanding USDT

An April 30, 2019 court filing disclosed that Tether held approximately $2.1 billion in cash and cash equivalents—defined in the filing as short-term securities—representing about 74% of outstanding tether tokens. The statement came from Stuart Hoegner, general counsel to both Tether and the affiliated Bitfinex exchange, in an affirmation filed with the Supreme Court of the State of New York.

The figure mattered because USDT was designed to trade near one U.S. dollar and was widely used as a dollar substitute between cryptocurrency exchanges. The filing did not say that Tether’s total assets covered only 74% of its tokens. It said the company’s cash and short-term securities did. Hoegner asserted that additional, less-liquid reserves were also available, but the filing did not provide an independently audited valuation or detailed composition for those assets.

A reserve disclosure inside a legal fight

Hoegner’s affirmation supported a motion seeking to vacate or modify an ex parte order dated April 24, 2019. That order required Bitfinex and Tether entities to produce records and restricted further transactions involving Tether’s dollar reserves while the New York attorney general investigated possible violations of the Martin Act.

The attorney general alleged on April 25 that Bitfinex had lost access to more than $850 million in client and corporate funds held through the payment processor Crypto Capital and had obtained access to as much as $900 million of Tether’s reserves. The office said Bitfinex had already drawn at least $700 million. Those amounts were allegations in an ongoing investigation on April 30, not adjudicated findings.

Tether and Bitfinex disputed the attorney general’s characterization. In an April 25 statement, Tether said the Crypto Capital funds were not lost but had been seized and safeguarded. Hoegner’s April 30 filing described a secured, revolving credit facility of up to $900 million. It said $675 million associated with funds at Crypto Capital and another $75 million in utilization requests had been incorporated into the facility, leaving $150 million available.

What the 74% figure did—and did not show

Dividing the reported $2.1 billion by 74% implies roughly $2.84 billion in outstanding tokens, although both inputs were rounded and the filing excluded tokens described as being in quarantine. That calculation is an approximation, not a separately verified supply measurement.

Hoegner also reported that average daily fiat redemptions from December 2018 through April 29, 2019 were $566,066, with the largest redemption at $24.2 million. These were company-supplied figures rather than exchange data, bank records or an auditor’s findings. The filing asserted that Tether had continued processing redemptions and that a complete draw of the remaining credit line would leave liquid reserves just below $2 billion, or approximately 68% of outstanding tokens.

For the market, the central issue was therefore not a demonstrated failure of USDT’s dollar price or a proven inability to redeem tokens. No such conclusion was established by the April 30 filing. The significance was the newly quantified gap between outstanding USDT and the reserve category most readily convertible into dollars, combined with the disclosed financial exposure between Tether and Bitfinex.

The event-day uncertainty

As of April 30, the affidavit was evidence of what Tether’s counsel represented under penalty of perjury, not an independent audit. The value, liquidity, collectability and priority of the additional reserve assets remained uncertain. The attorney general’s allegations were contested, and the court had not resolved the underlying dispute. What the filing established was narrower but consequential: cash and short-term securities covered approximately three-quarters of outstanding USDT, while the remainder depended on other assets, including a substantial receivable involving an affiliated exchange.