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 commercial paper, a form of unsecured, short-term corporate debt.

That led to fears that widespread investor redemptions would lead to a liquidity crisis.

Tether has since said it erased commercial paper holdings from its balance sheet entirely, replacing them with U.S. Treasury bills instead.

On Thursday, Tether said it had again boosted its U.S. government debt holdings so that now more than 58% of its assets consist of Treasury bills.

Tether said it reduced secured loans on its balance sheet by $300 million. In the September-December period, the company had $67 billion in assets against $66 billion of liabilities.

Despite the turbulence of the last year, Tether’s USDT token has endured, maintaining its $1 value after seeing over $15 billion wiped off its overall market capitalization since early May.

“After a tumultuous end to 2022, Tether has once again proven its stability, its resilience and its ability to handle bear markets and black swan events, setting itself apart from the bad actors of the industry,” Paolo Ardoino, Tether’s chief technology officer, said in a statement Thursday.

Still, the token and its issuer remain a source of contention in the crypto market. The U.S. Department of Justice is reportedly investigating executives at Tether over possible bank fraud.

In October, Bloomberg reported the Justice Department had appointed a new team after months of delays aimed at determining whether company officials committed a crime.

Stablecoin firms like Tether and Circle have long faced questions over their ability to become sustainable businesses. In December, Circle shelved plans to list publicly via a special purpose acquisition company, or SPAC.

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