Tether, Circle hit with information requests from U.S. Senator

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They say oppo­sites attract, and this is cer­tain­ly the case when it comes to sta­ble­coins and reg­u­la­to­ry scruti­ny. Now, Teth­er [USDT] and Cir­cle [USDC] are in the spot­light yet again along­side oth­er sta­ble­coin issuers.

Et tu, Senator?

Sen­a­tor and Chair of the U.S. Sen­ate Com­mit­tee on Bank­ing, Hous­ing, and Urban Affairs, Sher­rod Brown, sent out let­ters to a vari­ety of cryp­to enti­ties such as Coin­baseGem­i­niPax­osTrust­To­kenBinance.USCen­tre, Cir­cle, and Tether.

The let­ter for­mats were high­ly sim­i­lar, and con­tained the senator’s con­cerns about sta­ble­coins as assets, as well as ques­tions about their working.

One request from the let­ter sent to Cir­cle stat­ed,

“Please sum­ma­rize any inter­nal reviews or stud­ies your com­pa­ny has con­duct­ed about how spe­cif­ic lev­els of redemp­tions would affect USDC, includ­ing its con­vert­ibil­i­ty into U.S. dol­lars, or would affect the finan­cial posi­tion of your company.”

Cir­cle CEO and co-founder Jere­my Allaire was one of the few to pub­licly reply to the infor­ma­tion request. He expressed his will­ing­ness to work with the sen­a­tor and clear his doubts.

Mean­while, Teth­er and Bitfinex CTO Pao­lo Ardoino stressed on the fact that Teth­er wasn’t alone in being questioned.

Should the past stay in the past?

Here, it’s worth not­ing that USDC issuer Cir­cle recent­ly revealed that it was being inves­ti­gat­ed by the SEC and what’s more, was “coop­er­at­ing fully.”

Mean­while, Teth­er was deter­mined to move into the future with­out any past bag­gage – specif­i­cal­ly, a $41 mil­lion penal­ty cour­tesy of the Com­mod­i­ty Futures Trad­ing Com­mis­sion [CFTC]. The sta­ble­coin com­pa­ny has been test­ing new plat­forms – Notabene and Shyft – to ensure it com­plies with the Finan­cial Action Task Force’s [FATF] cryp­to Trav­el Rules.

The com­pa­ny also made sure every­one knew about its pro-reg­u­la­to­ry stance.

Back me up here

Is Teth­er ful­ly backed? And if so, is there a US dol­lar for every USDT token? These are time­less ques­tions and even the com­pa­ny is tired of them. How­ev­er, the cryp­to plat­form Pro­tos has been look­ing into USDT acqui­si­tions and whether large buy­ers got USDT at a discount.

In its report, Pro­tos claimed,

“In fact, Teth­er has gone out of its way to obfus­cate the ser­vices it pro­vides to the cryp­to indus­try. Dis­counts for large issuances are rumored. In our research, we are yet to find any con­fir­ma­tion of any dis­counts for USDT purchases.”

It added,

“But what is proven is that Bankman-Fried’s Alame­da Research and Cum­ber­land Glob­al are two pro­lif­ic Teth­er buy­ers that trust USDT is val­ued cor­rect­ly. Togeth­er, they’ve acquired at least $60 bil­lion worth of USDT in the past two years.”



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