Tether Ordered to Produce Documents Showing Backing of USDT

https://www.coindesk.com/markets/2022/09/21/stablecoin-issuer-tether-ordered-to-produce-documents-showing-backing-of-usdt/

Stablecoin Issuer Tether Ordered to Produce Documents Showing Backing of USDT

Tether has been ordered by a U.S. judgein New York to produce financial records relating to the backing of USDTas part of a lawsuitthat alleges Tether conspired to issue the stablecoin as part of a campaign to inflate the price of bitcoin (BTC).

The order requires Tether to produce “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements” as well as records of any trades or transfers of cryptocurrency or other stablecoins by Tether including information about the timing of the trades.

It also orders Tether to share details about the accounts it holds at crypto exchanges Bitfinex, Poloniex and Bittrex.

While attorneys representing Tether moved to block the order to release, calling it “incredibly overboard” and “unduly burdensome,” the presiding judge disagreed, writing that the “documents Plaintiffs seek are undoubtedly important.”

“[The] Plaintiffs plainly explain why they need this information: to assess the backing of USDT with US dollars,” wrote Judge Katherine Polk Failla.

“The documents sought in the transactions RFPs appear to go to one of the Plaintiffs' core allegations: that the … Defendants engaged in cyptocommodities transactions using unbacked USDT, and that those transactions "were strategically timed to inflate the market," the judge continued.

Tether subsequently issued a statement labelling the order "a routine discovery" that "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," Tether said.

Concurrently, there is also a lawsuit before the New York Supreme Court to have the New York Attorney General release documents it gathered in its investigation into Tether’s reserves. CoinDesk is a party to this case.

The New York Attorney General’s probe into Tether’s reserves concluded in February 2021 with an $18.5 million settlement.