In brief Tether is arguably the biggest cryptocurrency.

It is sitting on $4.9 billion of assets—or at least 74% of that.

Some of the assets are in investments, such as treasury bonds.

Crypto exchange Bitfinex runs arguably the most important cryptocurrency on the planet, Tether. It’s a stablecoin backed by US dollars that’s used by other exchanges, including Binance, Bittrex and ShapeShift.

Tether dominates the stablecoin market, with a market cap ten times its nearest competitor. It dominates the cryptocurrency market, with a market cap of $4.9 billion and daily trading volumes of $51 billion—which is 25% higher than Bitcoin’s.

Tether is the cryptocurrency with the highest trading volume. Image: Shutterstock.

But Tether has always been a bit mysterious. For one thing, it’s only 74% backed; Bitfinex’s general counsel revealed that its funds were used to cover an $850 million black hole in Bitfinex’s finances. That hole appeared after its Panamanian payments processor collapsed for being, essentially, a fake bank. And the New York Attorney General’s investigation into Bitfinex and Tether over this use of funds has already cost the exchange $500,000. So why keep the whole thing going?

“A huge money driver”

“It’s a huge money driver. That is one of the reasons why our racing horse is USDT,” Bitfinex CTO Paolo Ardoino explained, in an interview with Decrypt.

“The revenues of Tether are basically cash holding and safe investments like treasuries, so you can easily understand that if you can have a three, 3.5% return per year on a $4 billion market cap, or $4.8 now billion market cap, that is quite some interesting money there,” he said, adding, “You can do the math. More than $100 million.”

Ardoino added that only a small part of the reserves are held in such investments, specifying that the majority is held in cash.

“And that is why the competition started, because they were trying to get a piece of the pie,” he said.