Tether Ordered by Court to Disclose Assets Backing USDT Stablecoin
Stablecoin issuer Tether will soon have to demonstrate that its dollar-pegged USDT is properly backed as its claims.
Judge Katherine Polk Failla of the Southern District of New York has ordered Tether to provide all the proof and financial records on the assets and other funds that currently back their USDT stablecoin.
The court order comes after plaintiffs alleged that Tether was used to inflate the price of Bitcoin and was issued unbacked. The Judge’s mandate reads:
“Plaintiffs plainly explain why they need this information: to assess the backing of USDT with US dollars, and to allow a forensic accountant to assess the USDT reserve.
And although the Court understands the position to be that Plaintiffs’ theory is shifting with regard to ‘other assets’ and other funds, at this stage in the litigation and without compromise by the parties, the Court takes as true Plaintiffs’ representation that this information is necessary to assess its claims regarding USDT backing.
The documents sought in the transactions RFPs appear to go to one of Plaintiffs’ core allegations: that the defendants engaged in crypto commodities transactions using unbacked USDT, and that those transactions ‘were strategically timed to inflate the market.’”
Meritless Claims on USDT
After Tether unsuccessfully tried to convince the court to deny the plaintiffs request on the basis of it being “overbroad” and “unduly burdensome”, the company released a statement on its website:
“The order that was issued yesterday in the case captioned In Re Tether and Bitfinex Crypto Asset Litigation, is a routine discovery order and does not in any way substantiate plaintiffs’ meritless claims.
“We had already agreed to produce documents sufficient to establish the reserves backing USDT, and this dispute merely concerned the scope of documents to be produced. As always, we look forward to dispensing with plaintiffs’ baseless lawsuit in due course.”
Rumors of an unbacked Tether have been going around for years now. Should Tether collapse, it will likely take the entire crypto market down, including Bitcoin, since the stablecoin is the most popular asset to quickly buy and transact cryptocurrencies.
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Source: igaming
