Tether’s Billions Are Growing Fast, But Its Reported Profits Seem To Be Shrinking
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Tether Holdings, the issuer of the tether stablecoin, announced on its website last week that it earned more than $1 billion of “operational” profit in Q2, a gain of 30% from the preceding three months. In Q1 Tether reported that its “net” profit was $1.48 billion. Tacking on 30% would presumably bring “net” profit for the quarter that ended on June 30 to $1.92 billion. But read carefully, Tether did not report “net” profits in its latest release. It only reported “operational” profits, which is normally higher than net profits, because to arrive at net income a company must deduct non-operational expenses, including taxes and interest.
True to Tether’s penchant for obfuscation, the company did not define operational profit in its announcement nor explain why it was no longer reporting net income as it had in the previous two quarters Tether said the operational measure is “the recurrent profits generated by the activity of the Group in the second quarter of the year” and “Q1/23 was an exceptionally good quarter from a financial point of view. The $1.
Tether did say in its BDO-certified attestation that it increased its excess reserves by $850 million in Q2, bringing them to $3.3 billion. The company defines excess reserves as capital not needed for its one-for-one dollar backstop for its USDT tokens or distributed to shareholders.
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