Tether records surprise profit as stablecoin giant aims to put reserve controversy behind it

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Tether on Thursday published its latest quarterly financials, with the world's top stablecoin issuer stating publicly for the first time that it generated a profit. 

Tether, which is owned by Hong Kong-headquarter Ifinex, said in a new attestation report that it made a $700 million «net profit» in the December quarter. The company says it has added the money to its reserves.

Tether said its latest quarterly results were buoyed by interest rate hikes by the U.S. Federal Reserve, which have resulted in higher yields on government debt. «Tether is not disclosing any financial information other than those reported in the CRR [Consolidated Reserves Report],» Tether told CNBC in emailed comments.

Tether makes money from various fees, including a $1,000 withdrawal fee (with a minimum withdrawal requirement of $100,000), as well as investments in digital tokens and precious metals as well as issuing loans to other institutions.

Tether is the issuer of USDT, the world's largest stablecoin by market capitalization. Stablecoins are tokens that are meant to always be fully backed by an equivalent value of reserve assets.

The idea is that, when someone wants to sell one unit of tether, they get $1 dollar in return.

But Tether has long been dogged by concerns that its token isn't completely backed one-to-one by an equivalent value of reserves.

Last May, USDT temporarily lost its peg when terraUSD, a so-called algorithmic stablecoin, plummeted to near $0.

Tether said this was the result of volatility in the trading of USDT rather than a reflection of its ability to return cash to holders.

Of particular concern, however, was the quality of Tether's reserves. The firm previously held a large portion of its assets in