Tether: the $180bn gold whale

One thing to start: Transactions of $10bn or more have hit an all-time record in 2025 after US President Donald Trump’s deregulatory push unleashed Wall Street’s animal spirits and a blitz of global dealmaking.

And another: A former employee of US investment bank Jefferies International has been charged with insider trading by the UK regulator for allegedly telling a friend about a takeover of a London-listed company that he was advising.

In today’s newsletter:

The secretive crypto group buying billions in gold

Tether is one of the world’s most profitable cryptocurrency companies, but it’s lately seemed more bullish on bullion than digital coins.

Tether’s main offering is the stablecoin USDT, a cryptocurrency pegged to the US dollar that is in effect the largest digital money market fund. It has issued roughly $180bn of USDT and ploughed most of that money into US Treasuries while keeping billions of dollars in interest as profits.

But the small group of people who run Tether are investing its “deposits” far from cryptocurrencies, signalling they are not industry cheerleaders. The secretive company has roiled gold markets this year, becoming the world’s biggest holder of the precious metal outside of central banks, Bryce Elder writes in FT Alphaville. 

It has a stockpile “roughly equal to smaller central banks, such as Korea, Hungary and Greece”, according to the investment bank Jefferies. 

Last quarter the company’s gold purchases accounted for nearly 2 per cent of total gold demand and were equivalent to almost 12 per cent of central bank purchases, Jefferies estimates.

Sources tell DD that the gold bets are a reflection of Tether insiders’ belief that the commodity is the world’s best store of value and a better hedge against inflation than digital currencies. (While Tether does still hold billions in bitcoin, it now holds more money in gold.)

Tether’s gold ambitions go far beyond its own vault and into the world of dealmaking. Our attention is on Tether’s dealmaking around gold royalty companies, which invest in mines in return for a percentage of future revenues.

In June, Tether Investments, which is in charge of investing the company’s profits, paid $105mn for a minority stake in Toronto-listed Elemental Altus. It invested a further $100mn in Elemental in September as it announced a merger with rival EMX.

Tether now holds a controlling stake in Elemental, company filings show. Sources tell DD that Tether has bigger plans for Elemental: it’s looking to use its controlling stake to roll up other gold royalty companies.

“Their goal is to keep consolidating the small to mid-cap gold royalty space,” said a person briefed on the matter. Tether had held discussions with multiple gold royalty companies, the FT reported in September.

While some believe Tether’s gold royalty roll-up strategy is canny, not everyone is a fan. Tether “is the weirdest company I have ever dealt with”, one commodity industry executive recently told the FT.

Gold royalties have an advantage over stockpiled bullion: they give Tether a fixed exposure to gold that doesn’t change even if prices soar.

Tether’s gold bet comes as many on Wall Street are questioning whether its finances are as robust as the company claims.

Rating agency S&P Global on Wednesday downgraded Tether’s assets to its lowest rating, “weak”, warning that Tether’s rising exposure to high-risk reserve assets could leave its stablecoin undercollateralised in a crisis. 

Will Drahi end the creditor-on-creditor violence era?

Top money managers Apollo, Ares, BlackRock and Oaktree have been called many things over the years. But “illegal cartel” might be a new one. 

The accusation was levied by Altice USA, the troubled telco led by Patrick Drahi, in a lawsuit filed on Tuesday. Altice USA alleges that its creditors violated US antitrust laws by colluding in an attempt to force the company into bankruptcy.

The suit centres on a document known as a co-operation agreement (read: NON-co-operation agreement), which stipulated no creditor could cut a deal with Drahi without permission from the group. The holders of nearly every dollar of Altice USA’s $26bn debt stack signed it.

DD has long covered the distressed debt wars and their legal machinations but a competition claim is novel (the FT scooped last month a similar claim involving Selecta, the Swiss vending machine company). 

Experts are divided on whether antitrust law can be successful in resolving what are typically contract or securities law disputes. 

At DD we find it humorous that a dispute involving the likes of Drahi, Kirkland & Ellis, PJT Partners and Apollo has anyone claiming the moral and legal high ground or displaying righteous indignation. 

A senior person at one of the boldfaced vulture funds in the co-operation group cheekily sent an FT reporter Tuesday night the long profile of Drahi published in The New Yorker over the summer, intimating that maybe the tycoon was the roughest character in this tussle.

Perhaps this will be the moment the distressed debt battlefield tilts back to hedge funds after years of brutal “creditor-on-creditor violence” losses.

DD will follow this latest drama if for no other reason than to track the bruised egos and low-grade epithets.

Job moves

• RBC has hired Sidharth Chhibbar as head of European healthcare. Chhibbar joins from Barclays, where he was a managing director.

• Barclays has hired Tim Alden as global head of its aerospace and defence investment banking team. He joins from Macquarie Group, where he was a managing director.

• Keurig Dr Pepper has named Anthony DiSilvestro chief financial officer. He was previously CFO of the toymaker Mattel.

Smart reads

Open for business After years of icy relations with private equity, Japan is warming up to the industry, FT reporters explain on the Behind the Money podcast. 

In the toilet PE firms saddled with ageing assets have turned to continuation vehicles, but a souring portable toilet deal shows the strategy’s risks, Bloomberg writes. In the case of the toilets, Wall Street giants are bracing for a total loss.

Big tech Size is an unmistakable strength for tech’s most famous monopoly, Lex writes, with Alphabet adding $1.3tn to its market cap in the months since a US judge decided against breaking up Google.

News round-up

‘Steroid Olympics’ organiser to go public in $1.2bn Spac deal (FT)

Kalshi hit as Nevada judge deems platform is subject to gambling laws (FT)

Trafigura star trader plotted fake nickel scheme, Prateek Gupta tells court (FT)

NYC comptroller urges city pensions to pull $42bn mandate from BlackRock over climate (FT) 

Campbell’s fires executive who criticised its food in recording (FT)