The control finding
Tether Gold. A claim on vaulted bullion: Tether holds the metal and controls the token.
- Holder’s position
- XAUT represents a claim on Tether's allocated gold bullion held in Switzerland, not direct ownership of a specific bar unless the holder completes physical redemption.
- Redemption or exit
- Holders can redeem XAUT for allocated physical gold or cash through Tether, subject to a minimum redemption size and identity verification, or sell XAUT on the open market.
Dependencies an advisor should record
- Tether's vaulting and custody arrangements
- Tether's freeze and administrative authority over the token contract
- Redemption minimums and verification requirements
- Market liquidity for the peg
- The token contract and any bridge across chains
Why this distinction matters
XAUT gives a client gold price exposure with issuer counterparty risk layered on top of vaulting risk. A fiduciary should document Tether's redemption terms separately from the custody arrangement, since the two do not move together.
A named organization or administrator controls issuance, transfers, reserves, redemption, or address restrictions. That finding can coexist with a sound reserve, useful product, or appropriate client role. The grade prevents the on-chain wrapper from being mistaken for the absence of an administrator.
Questions before use
- Does the exact contract and chain match the instrument reviewed here?
- Which party can mint, burn, pause, upgrade, block, or redeem?
- Does the client have direct redemption access or only secondary liquidity?
- What protocol, bridge, wallet, and custodian dependencies are added?
- Which event would force review or exit?
Sources
Documents and product terms can change. This profile records the control interpretation reviewed on 2026-08-19; verify current terms before implementation.
Legend: No freeze key: no issuer or administrator can freeze an address at this layer · Governed, no freeze: on-chain collateral and governance set the terms, but no issuer blocklist exists · Mixed control: on-chain mechanisms sit beside custodians, real-world assets, a central transaction orderer, or other parties a court or regulator can compel · Issuer can freeze: a named organization or administrator controls issuance, transfers, reserves, redemption, or address restrictions. How grading works.