Stablecoin Issuer Tether Ordered by US Court to Show Proof of USDT Backing
The order aligns with an ongoing lawsuit that claims that Tether issued unbacked USDT to inflate Bitcoin (BTC) price.
Stablecoin issuer, Tether has been ordered by New York Judge Katherine Polk Failla, to come forward with documents to prove its USDT backing. The order aligns with an ongoing lawsuit that claims that Tether issued unbacked USDT to inflate Bitcoin (BTC) price. In addition, the lawsuit is also claiming that Tether’s dealings caused no less than $1.4 trillion worth of damage to the general crypto market.
USDT Issuer Tether to Tender Financial Records
Per the court order, Tether has now been told to produce all records that show its backing of the USDT stablecoin. The records will include balance sheets, general ledgers, cash-flow statements, income statements, and profit and loss statements.
Tether will also provide records detailing its trades with other cryptocurrencies and stablecoins. While the stablecoin issuer will share details of the timing of each trade, it has also been asked to fully disclose information about its account at Bitfinex, Poloniex, and Bittrex.
Meanwhile, the order comes despite the efforts of Tether’s legal team to ensure it does not happen. Before the order was pronounced, Tether’s attorneys had said it would be “incredibly overboard” and “unduly burdensome.” However, the judge insists that the order is well in line with arriving at a logical conclusion in the lawsuit. She wrote:
“The Plaintiffs plainly explain why they need this information: to assess the backing of USDT with US dollars.”
It appears that Tether at the moment has some more accountability to do. Apart from the BTC price inflation lawsuit, the firm also faces another lawsuit that runs concurrently alongside.
The other suit is presently at the New York Supreme Court. And it is calling for the records found during an inquiry into Tether’s reserves to be released. That inquiry was carried out by the New York Attorney General’s office and was concluded in February 2021. That was after an $18.5 million settlement.
So far, the news is yet to draw a reaction from the price of Tether USDT. As of press time, CoinMarketCap data shows it trading at $1.00 with a trading volume of $49,011,085,575.