Media accuse Tether of using Signature Bank services

The company asked its customers to buy USDT for dollars through the Signet payment system

05.04.2023 - 08:30

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2 min

What’s new? Tether (the issuer of the USDT stablecoin) used Signature Bank to enter the US financial system. According to Bloomberg’s sources, Tether was asking its customers to buy stablecoins by sending dollars to its banking partner in the Bahamas, Capital Union Bank, through Signature’s Signet payment platform. The move allowed Tether to gain access to the US banking system.

Material on the Bloomberg website

What else is known? Bloomberg’s sources reported that this system was still operating when Signature was taken over by regulators in March 2023. While the agreement between Tether and Signature is not illegal, hiding this information for investors indicates a high degree of risk.

According to the agency’s Tether interlocutor, the company’s partner banks have always had access to multiple banking channels and counterparties, and associates would not have been affected either directly or indirectly by Signature.

The New York State Department of Financial Services (NYSDFS), jointly with the Federal Deposit Insurance Corporation (FDIC), announced the March 12 closure of Signature to protect the US economy. On March 23, the FDIC sold it to Flagstar Bank without the cryptocurrency part of the business. After April Signature customers’ crypto deposits will be forcibly shut down, no word yet on the regulator’s plans for the Signet payment network. That said, Tether CTO Paolo Ardoino said the company has nothing to do with the bank that went bankrupt.

#tether doesn't have any exposure to Signature Bank. — Paolo Ardoino 🍐 (@paoloardoino) March 12, 2023

According to the WSJ, top executives at Signature were involved in $100 million in insider trading. Major stock sales occurred after the bank began working with crypto companies.

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