Summary
The documentary record confirms that TG Commodities is duly licensed as both a stablecoin issuer and Digital-Asset Service Provider in El Salvador, has filed the requisite Relevant Information Document, and maintains the audited, fully segregated gold reserves required by the Stablecoin Regulations. Therefore, according to our preliminary screening presented below, no immediate legal impediment appears to onboarding XAU₮.
That said, two areas of enhanced transparency would strengthen our due diligence:
- Publicly identifying the Swiss custodian, together with its regulatory status and any senior security interests
- Supplying registry records that verify control has passed from the former BVI entities to the Salvadoran corporate structure described in the RID.
Assuming a favorable TEMP CHECK vote and positive DAO sentiment, we will deliver a full risk analysis of the asset at the ARFC stage.
Regulatory Framework under XAU₮’s Issuance
Tether Gold (XAU₮) is issued in El Salvador by TG Commodities, S.A. de C.V., a Salvadoran sociedad anónima de capital variable that enjoys full corporate personality under the Commercial Code. The company appears in the National Digital Assets Commission (CNAD)’s public registry as a licensed Digital-Asset Service Provider (DASP), has obtained formal authorization as a stablecoin issuer pursuant to Article 5 of the Reglamento de Emisión de Ofertas Públicas de Monedas Estables (Regulations on Issuance of Public Offering of Stable Currencies or “Stablecoin Regulations”), and has lodged a complete Relevant Information Document for XAU₮ under Article 22 of the Ley de Emisión de Activos Digitales (Law for the Issuance of Digital Assets). Collectively, those filings subject both the issuer and the token to El Salvador’s public-offering regime for digital assets.
Article 5 of the Stablecoin Regulations establishes an exhaustive documentary dossier that every applicant must furnish. A corporate issuer must describe its business, state its domicile, and supply certified copies of its charter documents and any amendments on file with the Registry of Commerce. It must identify its partners, shareholders, and ultimate beneficial owners, disclosing individual identity documents and tax numbers where any holding reaches or exceeds ten per cent of the capital. Directors, officers, and authorized signatories must likewise be named, their mandates evidenced by registry filings, and their professional credentials demonstrated by curricula vitae. Three years of audited financial statements are ordinarily required; entities of more recent vintage may file the statements available and, if they have traded digital assets for at least three years, may substitute auditor attestations. From the moment they obtain stablecoin status, issuers without prior audits must provide an external auditor’s report within six months of each fiscal year-end. Additional items include a copy of the tax-identification certificate, the principal website address, a list of jurisdictions in which operations are conducted, and an inventory of any digital assets already offered to the public.
The same Article stipulates that, whenever the issuer lists or trades the stablecoin on its own or a third-party platform, registration as a Digital-Asset Service Provider with the CNAD is obligatory.
The regulatory definition of a “stablecoin” aligns precisely with XAU₮’s architecture: a digital asset that references, represents, or is backed by an International Reserve Asset—or a basket thereof—and is structured to minimize volatility relative to that reference. “International Reserve Asset” is equally accommodating, encompassing gold, other widely traded commodities, low-risk debt instruments, cash equivalents, approved stablecoins, and similar assets deemed appropriate by the CNAD.
Under Article 6, every stablecoin issuer must advise the CNAD of the quantity of tokens to be minted, the type and amount of reserve assets to be held, the procedures governing issuance and burning, the address of its principal website, and the distributed-ledger protocols employed. Once those particulars are received, the CNAD must issue a Resolution of No Objection within five business days unless it identifies grounds for refusal. Upon issuance of that resolution, the public offering is deemed qualified.
Legal Standing of TG Commodities
A sociedad anónima is a share corporation whose owners bear liability limited to their contributions, while the capital variable regime permits increases or reductions of share capital without amending the charter. Consequently, TG Commodities possesses legal personality distinct from its shareholders and is empowered to acquire, hold, and encumber property, including the London-Good-Delivery gold bullion that secures XAU₮, subject to any sectoral licensing requirements.
TG Commodities is recorded in the CNAD registry as an active stablecoin issuer, and the Commission has acknowledged an XAU₮ issuance dated 19 May 2025.
Source: CNAD Public Registry - Issuers, June 2nd, 2025
Source: CNAD Public Registry - Issuances, June 2nd, 2025
The public DASP registry confirms the company’s license number and the scope of its authorization.
Source: CNAD Public Registry - DASP, June 2nd, 2025
Article 4 of the DASP Regulations catalogues the services a licensee may provide, including the exchange of digital assets for fiat or other digital assets, operation of trading platforms, underwriting and placement of digital-asset issues, administration or custody of tokens and private keys, and execution of orders for derivative digital assets. Article 7 details the information and disclosures required for license holders, thereby supporting TG Commodities’ statement that it obtained its DASP registration under that provision.
Corporate Structure
RID expressly records that TG Commodities is wholly owned by Tether Holdings S.A. de C.V. and Tether Operations S.A. de C.V., both corporations duly organized and existing under the laws of the Republic of El Salvador (RID § 1.1, “Organizational Structure”).
The Legal Entity Identifier database, by contrast, lists Tether Operations Ltd., incorporated in the British Virgin Islands, whose ultimate parent is identified as Tether Holdings Ltd. No publicly accessible filing demonstrates how, or whether, those BVI entities are integrated into the Salvadoran corporate stack now described in the RID. The supposed linkage has so far appeared only in press releases announcing the group’s “relocation” to El Salvador and is not corroborated by registry documents available for public inspection.
Because the Salvadoran corporate registry is not open to unrestricted online examination, independent verification of the current shareholding chain and inter-company relationships is not feasible through primary-source searches.
A Schedule TO submitted to SEC in March 2025 references Tether Investments S.A. de C.V. but omits any mention of BVI-incorporated structures, thereby suggesting that the companies domiciled in El Salvador occupy the relevant roles for the purposes of that filing.
Taken together with the RID’s explanation of TG Commodities’ migration from BVI jurisdiction, these disclosures support the inference that the entities responsible for issuing and administering Tether Gold have either completed, or are nearing completion of, a corporate re-domiciliation intended to bring their activities wholly within the Salvadoran regulatory framework.
Reserves
Under Salvadoran Stablecoin Regulations, TG Commodities must maintain segregated reserves equal to 100% of the XAU₮ in circulation and structure those reserves so that at least 70% consists of assets liquid within thirty days, with the balance liquid within a longer horizon. Reserve assets may not be invested in instruments issued by entities that are related to the issuer’s shareholders or senior executives, or in any assets that would create a conflict of interest.
The legal representative must file a sworn monthly statement and procure an independent quarterly attestation regarding the size and composition of the reserves, publishing those attestations on the issuer’s website. The CNAD must also be informed of the financial or digital institution where the reserves are custodied and of any subsequent change, with the issuer guaranteeing adherence to international best practice in vaulting and custodial arrangements.
Compliance measures are set out in TG Commodities’ Relevant Information Document (RID), which specifies that each token embodies an undivided interest in one fine troy ounce of LBMA-standard gold. The bullion is vaulted in Switzerland by an affiliate operationally segregated from the wider Tether group and maintaining separate financial accounts, records, and personnel. Quarterly ISAE-3000 attestations by BDO Italia verify both the bar count and one-to-one backing (for example, the March 2025 report recorded 246 524.38 oz of gold against 246 524.33 XAU₮ outstanding). A real-time look-up tool on gold.tether.to maps every on-chain address to the serial numbers of the bars allocated.
Physical acquisition and deposit of bullion are handled by Alpha Group Commodities Limited S.A. de C.V. (“AGCL”), a wholly owned subsidiary of Tether Holdings. Once AGCL places gold with the custodian, TG Commodities issues the corresponding quantity of XAU₮ to AGCL, which retains the tokens in inventory until sales are made to fully verified customers. The arrangement ensures a standing pool of tokens available for immediate settlement.
Because AGCL never offers tokens (or other digital-asset services) to the public, it is not listed as a DASP in the CNAD’s public register; instead it falls under ordinary Salvadoran corporate and commercial law.
Purchase and Redemptions
Only customers who complete TG Commodities’ KYC process and pay the USDT 150 verification fee may acquire XAU₮. The minimum purchase is 50 XAU₮, and transactions are priced at the prevailing Swiss gold market quotation plus a 25bp spread, as detailed in RID.
The Regulations do not prescribe a fixed redemption window but apply a prudential-time standard: the issuer must process redemptions within a commercially reasonable period, subject to the procedures, fees, cut-off times, minimum sizes, and delivery terms disclosed in the Relevant Information Document. TG Commodities requires verified holders to deposit at least 430 XAU₮—sufficient to cover the heaviest LBMA bar—for redemption. A fee of 25bp on the bar’s spot value, together with Swiss domestic delivery charges, is levied. Bars may be shipped to any Swiss address, or, at the holder’s option, sold into the Swiss market with the cash proceeds remitted in United States dollars. The terms of service oblige the issuer to employ commercially reasonable efforts to process requests promptly.
Restrictions
XAU₮ is unavailable to persons falling within the categories designated as prohibited. These include United States persons, Canadian residents and entities, the Government of Venezuela and its instrumentalities, any individual or entity associated with jurisdictions subject to comprehensive sanctions, namely Cuba, Iran, North Korea, Singapore, Syria, Crimea, and the territories of Donetsk, Luhansk, Kherson, and Zaporizhzhia, and any person listed by the Office of Foreign Assets Control or equivalent sanctions authorities, together with any entity majority-owned by a listed party. TG Commodities may, at the request of law-enforcement or regulatory bodies, attempt to freeze tokens held in external wallets outside its control and may defer or suspend redemptions where a wallet is under investigation, subject to litigation, or implicated in prohibited use.
Title and Custody
Each XAU₮ represents ownership of an undivided, specific interest in one troy ounce of gold meeting LBMA London Good Delivery standards. Legal title to the bullion is held by a Swiss custodian on behalf of the token holders; TG Commodities itself does not hold title. The custodian, a related but operationally separate entity, is not involved in the creation or issuance of tokens and is contractually obliged to release either the bar or its sales proceeds upon redemption. Article 14 of the Stablecoin Regulations requires the issuer to disclose the custodian to the CNAD and to ensure that vaulting adheres to recognized international standards, although the public disclosure of the custodian’s identity remains subject to interpretation and, at present, is limited to the jurisdictional reference to Switzerland.
Other Disclosures
The Bitfinex platform, operated by subsidiaries of iFinex Inc., provides various services to the Tether group. Management and shareholding overlaps exist between the Tether and Bitfinex groups, and Tether Gold tokens are admitted to secondary-market trading on the Bitfinex platform in accordance with its terms of service.
The issuer’s framework for anti-money-laundering, counter-terrorist-financing, counter-proliferation, and sanctions compliance aligns with recommendations of the Financial Action Task Force, the Wolfsberg Principles, the United States Bank-Secrecy Act, the British Virgin Islands AML Regulations 2020, and El Salvador’s own money-laundering statute. Verification relies on industry-standard vendors to confirm identities and screen applicants against sanctions, politically exposed person, and law-enforcement databases, complemented by open-source adverse-media searches. Blockchain addresses are continually risk-scored with Chainalysis Reactor, and a dedicated investigations team reviews alerts. Where suspicions are substantiated, the issuer files the requisite suspicious transaction or activity reports and may freeze or terminate the relationship.
All token-related disputes are subject to confidential, binding arbitration under the CPR International Non-Administered Rules, seated in the British Virgin Islands and governed by BVI law. Proceedings are conducted by a sole arbitrator with at least fifteen years’ BVI commercial practice, ordinarily by video conference unless both parties consent to meet in person. Collective proceedings are excluded, and costs follow the event, with filing-fee reimbursement for successful claims below $15000. Parties must first exhaust an internal complaint process through Tether’s customer-support portal.
Finally, Article 36 of the Ley de Emisión de Activos Digitales exempts both the nominal value of XAU₮ and any income or capital gains arising from the token from all Salvadoran taxes and duties, whether existing or future. RID reproduces that exemption and advises holders to seek advice on the fiscal treatment applicable in other jurisdictions.
Disclaimer
This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.