Tether Gold (XAUT)

An XAUT token is a claim on one fine troy ounce of gold on a specific London Good Delivery bar. TG Commodities, S.A. de C.V., authorised by El Salvador’s National Commission of Digital Assets, issues it on Ethereum. Its reserves report as of 30 June 2026, which BDO Advisory Services examined to a reasonable-assurance standard, counts 707,747.139 ounces against 707,747.090 tokens and says: “The Gold Reserves are vaulted in Switzerland. The Gold Reserves are owned by the XAU₮ token holders, not by the Company.” The custodian is still unnamed. Tether Gold’s risk disclosure says only that it is a related party. XAUt0, the form found on thirteen other chains, is a different token. The USDT0 Network, run by Everdawn Labs, mints it against XAUT locked in an adapter contract on Ethereum that a 3-of-5 Safe owns. Tether Gold’s terms say a third party’s wrapped or bridged token is not a Gold Token. An XAUt0 holder reaches gold only by burning XAUt0 for XAUT and then dealing with Tether Gold. The adverse assessment stands, and the new evidence moves it further from approval, not closer. Two earlier points have softened: the vault country is now on the record, and the reserve check is stronger than the earlier memo said. Three findings are new and cut the other way. The 3-of-6 multisig that owns USDT on Ethereum also owns XAUT, and the contract lets it block any address, burn that address’s balance, mint, and replace the code; on 2026-02-17 it blocked one address and burned its 12 XAUT. Redemption comes only in whole bars of 430 tokens, delivered in Switzerland or sold by a broker, so a smaller holder cannot redeem at all. And U.S. persons may not hold a Gold Token Wallet unless Tether Gold accepts them as Eligible Contract Participants, which shuts most clients of a U.S. adviser out of buying from or redeeming with Tether Gold. Their only exit is a sale on an exchange or a DEX. A physically backed gold ETF gives the same metal with daily creation and redemption and no issuer that can burn the holding.

Review triggers: events that reopen the verdict
• Tether Gold names its custodian, and an independent review shows the bars are out of reach of the custodian’s and Tether’s creditors
• Tether Gold opens redemption to U.S. persons who are not Eligible Contract Participants, or below one 430-token bar
• The XAUT owner changes from the 3-of-6 MultiSigWallet 0xC6CD…A828, the proxy points at a new implementation, or the owner burns another blocked balance
• A reserves report shows fewer ounces than tokens, is missed, changes firm, or drops to limited assurance
• Tether Gold names XAUt0 in its terms, or XAUT held in the OFT Adapter falls below XAUt0 supply across all chains
• Any sanctions or AML enforcement action lands against Tether or TG Commodities

Reaffirmed 2026-09-26: 0 days quiet across 2 files, no open item. Holds to 2027-09-27 while the watch stays quiet.

The research file

What the holder owns

Section 4.3 of the Gold Token Terms of Sale and Service (last updated 9 September 2025) says: “Each Gold Token reflects ownership of an undivided specific interest in one fine troy ounce of gold in the Gold Reserves.” The June 2026 reserves report adds that the custodian holds the bars “as representative of the XAU₮ token holders” and that Tether Gold mints only after bars have cleared the custodian’s intake. On that date the reserve held 1,759 bars of 12.5 kg, 15 of 1 kg, and 18 of 0.5 kg.

The link between a token and a bar lives in Tether Gold’s own software, which assigns a bar, or part of one, to each address that holds tokens; the chain itself records no bar. The risk disclosure warns that if that allocation fails, a holder who cannot redeem may stand as an unsecured creditor of the custodian. Of the 707,747.09 tokens minted, only 612,823.66 had been sold. The other 94,923.43 sat with Alpha Group Commodities, S.A. de C.V., a related entity, waiting for buyers, so about 13% of the supply is held inside the group.

Vault and assurance

The earlier memo said no issuer document confirmed a Swiss vault. The reserves report as of 30 June 2026, approved by Giancarlo Devasini as sole administrator on 31 July 2026, states it plainly: the bars are vaulted in Switzerland. It still does not name the custodian, and the risk disclosure says “the Custodian is a related party to Tether Gold.” A holder therefore relies on a Tether affiliate to keep the bars apart from Tether’s own creditors, and no document shows how that separation would hold in an insolvency.

BDO Advisory Services S.r.l. of Milan examined the report under ISAE 3000 Revised as a reasonable-assurance engagement, engaged by Tether Global Investments Fund SICAF SA. Its procedures included counting the bars against the report, sample quality tests by a specialist, and reconciling the ledger to the tokens on chain. The earlier memo called this limited assurance; the June 2026 report says reasonable, which is the higher bar. It is still a count on one date each quarter, and BDO says it gives no assurance for any other day. Paxos publishes a monthly KPMG attestation for PAXG.

Who controls the XAUT contract

XAUT is an upgradeable proxy at 0x68749665FF8D2d112Fa859AA293F07A622782F38. The verified implementation, 0x4c0d…e566, is Tether’s TetherToken code with a block list. Its owner can call addToBlockedList to stop an address from sending, destroyBlockedFunds to burn a blocked address’s whole balance, mint to create new tokens, and upgradeTo to swap in new code. The owner is a MultiSigWallet at 0xC6CDE7C39eB2f0F0095F41570af89eFC2C1Ea828 that needs three of six signatures, and the same wallet owns USDT on Ethereum. Three keys can therefore burn any XAUT balance or rewrite the contract, with no delay a holder could see coming.

The owner has used these powers. The contract logged five BlockPlaced events between 2025-06-21 and 2026-05-22. On 2026-02-17 the multisig blocked 0x95ae…ab80 and, three blocks later, burned its 12 XAUT through destroyBlockedFunds. The earlier memo found no XAUT freeze; the chain shows one. Section 2 of the terms backs the code: Tether Gold may “freeze any Gold Tokens held by you … as required by applicable Law or where Tether Gold, in its sole discretion, determines it is prudent to do so,” and the terms also reserve the right to blacklist addresses and seize tokens. The power reaches every holder, customer or not.

XAUt0 is a separate program

XAUt0 is a LayerZero token issued by the USDT0 Network, which Everdawn Labs Limited runs. A holder who sends XAUT to another chain locks it in the OFT Adapter on Ethereum, 0xb9c2321BB7D0Db468f570D10A424d1Cc8EFd696C, and receives XAUt0 minted on the other side; burning XAUt0 releases the XAUT. The adapter held 29,380.431 XAUT on 2026-09-23, about 4% of the supply. A 3-of-5 Safe, 0x4dff…0bf8, owns the adapter and the XAUt0 contracts on most EVM chains; Ink and HyperEVM have their own owners, and on Solana one address, 9FJs…Y7Sy, is both mint and freeze authority. Where the code is verified (Arbitrum, Avalanche, Celo, Polygon, Ink), the owner can block an address and burn its balance, as on XAUT; on BSC, Monad, Plasma, and HyperEVM the source is not verified, so those powers are unread. An XAUt0 holder carries two sets of keys, USDT0’s and Tether’s, plus LayerZero’s messaging, which this registry has already rejected on its own.

Tether Gold does not stand behind XAUt0. Section 4.11 of its terms says a third party may create a token that claims to be a wrapped or bridged version of a Gold Token, and “these Digital Tokens are not Gold Tokens.” The terms do not name XAUt0 either way. USDT0’s deployment list names fifteen networks: Ethereum, where XAUT is locked, and fourteen where XAUt0 is minted, counting Hyperliquid’s HyperCore and HyperEVM apart. The earlier memo counted XAUt0 as XAUT on seven chains; this memo covers both tokens across Ethereum and the thirteen chains DefiLlama names.

Who may buy, hold, and redeem

Anyone may hold XAUT in a wallet except Canadian and Singaporean persons, sanctioned persons, and people in the jurisdictions the terms list. Buying from or redeeming with Tether Gold takes a verified account and a 150 USDt verification fee, and the smallest purchase is 50 tokens, which is 50 ounces. Section 3.4 bars U.S. persons from holding a Gold Token Wallet “except for Eligible Contract Participants agreed by Tether Gold, in its sole discretion.” Under the Commodity Exchange Act an individual qualifies as an Eligible Contract Participant with more than $10 million invested on a discretionary basis, so the path is closed to most individual clients even before Tether Gold uses its discretion. Moving tokens into or out of a Gold Token Wallet also needs Tether Gold’s consent (Section 4.1).

Redemption comes in steps of 430 tokens, one bar, adjusted to that bar’s weight. The customer either collects the bar at a place in Switzerland, for a delivery fee, or has Tether Gold’s broker sell it in the Swiss market and wire the dollars. The fee is 0.25% plus delivery or brokerage costs, the process takes several business days, and Tether Gold may delay if the gold is illiquid, unavailable, or lost, or if a government demands it. The earlier memo said a holder below 430 tokens could ask for a broker sale instead; the fee schedule sets 430-token steps for any redemption, so below one bar there is no redemption, only a market sale.

Issuer, jurisdiction, and group record

TG Commodities moved from the British Virgin Islands to El Salvador in January 2025 and holds authorisation as a Stablecoin Issuer and Digital Assets Service Provider under El Salvador’s Digital Asset Issuance Law. The June 2026 report adds that it is registered with FinCEN as a Money Services Business and reports to El Salvador’s Financial Investigation Unit. That is lighter oversight than the OCC charter Paxos Trust holds for PAXG. The group’s record weighs on the judgment: on 2021-02-17 the New York Attorney General settled with Tether and Bitfinex for $18.5 million after finding that Tether had at times held no reserves behind USDT and that the firms hid an $850 million loss; both were barred from New York. Reporting in October 2024 described a federal inquiry into Tether over possible sanctions and money-laundering breaches tied to USDT. Tether denied knowing of any investigation, and this review found no public outcome.

Comparison and decision

Against PAXG, XAUT is weaker on each point a holder can check: an unnamed related-party custodian against a named national trust bank, a quarterly count against a monthly one, and a redemption closed to most U.S. persons against one open to any verified Paxos customer. Both issuers can freeze and take tokens, and both have done it. Against a physically backed gold ETF, XAUT adds an issuer that has burned a holder’s balance, a related-party vault, and an exit that for a U.S. client is a market sale.

The earlier memo rejected XAUT on custody opacity, a light regulator, discretionary redemption, and the group’s record. The Swiss vault and the reasonable-assurance report narrow the first ground without closing it, since the custodian is still an unnamed affiliate. The other grounds stand, and the burn on 2026-02-17 and the U.S. person rule add weight. The assessment stays adverse. It reopens if Tether Gold names an independent custodian and shows the bars are out of its creditors’ reach, or opens redemption to U.S. clients below one bar.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• Tether Gold: Gold Token Terms of Sale and Service, last updated 9 September 2025 (page) · primary · accessed 2026-09-23
  Supports: issuer identity, freeze, blacklist and seizure, U.S. persons, wrapped or bridged tokens
• Tether Gold: terms, fee schedule, and risk disclosure statement as served in the gold.tether.to site script · primary · accessed 2026-09-23
  Supports: Section 4.3 ownership, Section 3.4 Eligible Contract Participants, Section 4.11 wrapped tokens are not Gold Tokens, 50-token minimum and 150 USDt fee, 430-token redemption steps and 0.25% fee, custodian is a related party, allocation software
• BDO Advisory Services: ISAE 3000 Revised reasonable-assurance report on the Tether Gold reserves report as of 30 June 2026 · primary · accessed 2026-09-23
  Supports: 707,747.139 oz held, 707,747.090 XAUT minted, 612,823.66 sold, vaulted in Switzerland, owned by token holders, Alpha Group Commodities holds unsold tokens, FinCEN MSB registration, reasonable assurance
• XAUT token implementation on Ethereum (Sourcify exact match) · primary · accessed 2026-09-23
  Supports: addToBlockedList, destroyBlockedFunds, owner mint, upgradeTo
• XAUT owner: MultiSigWallet, 3 of 6 (Sourcify match), the same wallet that owns USDT on Ethereum · primary · accessed 2026-09-23
  Supports: 3 of 6 confirmations, owner of XAUT and USDT
• Blockscout: XAUT multisig transaction burning 12 XAUT from a blocked address, 2026-02-17 · primary · accessed 2026-09-23
  Supports: DestroyedBlockedFunds on XAUT, executed by the owner multisig, five BlockPlaced events 2025-06-21 to 2026-05-22
• USDT0 docs: deployments API, XAUt0 contracts and the OFT Adapter · primary · accessed 2026-09-23
  Supports: fifteen networks, OFT Adapter address, XAUT contract address
• USDT0 docs: the USDT0 Network, lock-and-mint architecture · primary · accessed 2026-09-23
  Supports: lock and mint, redemption by burning
• USDT0 docs: additional token behavior · primary · accessed 2026-09-23
  Supports: owner-held block list, upgradeable proxies
• 7 U.S.C. 1a(18): definition of Eligible Contract Participant · primary · accessed 2026-09-23
  Supports: $10 million discretionary investment test for individuals
• New York Attorney General: Tether/Bitfinex settlement · primary · accessed 2026-08-17
  Supports: 2021 NYAG settlement, reserve misrepresentation, New York operating ban
• Fortune: report of DOJ probe into Tether · secondary · accessed 2026-08-17
  Supports: 2024 DOJ sanctions and AML probe, unresolved status

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.