US court calls on Tether to provide financial reports on the backing of USDT stablecoin

Also, the issuer of the stablecoin should disclose information about cooperation with Bitfinex, Poloniex, and Bittrex exchanges

21.09.2022 - 10:30

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What’s new? The US District Court for the Southern District of New York ordered to provide Tether’s financial records relating to the backing of USDT. According to CoinDesk, the issuer of the stablecoin required also share data about its accounts on the cryptocurrency exchanges Poloniex, Bittrex, and Bitfinex (the latter, like Tether, is a subsidiary of iFinex). The information is likely needed to confirm accusations that Tether was involved in trades using unbacked USDT and that these transactions “were strategically timed to inflate the market.”

CoinDesk’s material

More details on the situation. Attorneys for the company tried to challenge the court’s order, calling it “unduly burdensome,” but the judge denied the motion, saying that the “documents Plaintiffs seek are undoubtedly important.”

The court’s disclosure order involves providing ledgers, balance sheets, income statements, and cash-flow statements, as well as records of any trades, transfers of cryptocurrency, or other stablecoins by Tether, including information about the timing of the transactions.

What is known about Tether? It is the largest issuer of stablecoins in the cryptocurrency market. The stablecoin USDT ranks third in the overall ranking of cryptocurrencies by capitalization with a figure of $67,9 billion, according to CoinMarketCap as of September 21.

Earlier, accounting firm BDO Italia, hired by Tether to audit USDT’s reserves, published a report showing that as of June 30, the issuer’s total assets exceed its consolidated liabilities and amount to $66,4 billion and $66,2 billion, respectively. There was also a 58% drop in commercial paper volume from the previous quarter. At the end of August, the WSJ journalists pointed to the possible insolvency of Tether.

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