Tether says new court order to produce USDT reserve backing is a ‘routine discovery matter’

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On Wednes­day, Teth­er (USDT), the issuer of the U.S. dol­lar-pegged USDT sta­ble­coin, said that a recent order by a U.S. judge to pro­vide evi­dence of USDT back­ing is part of rou­tine dis­cov­ery in court cas­es. The firm said that the deci­sion did not sub­stan­ti­ate any of the claims list­ed in an ongo­ing lawsuit: 

“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. As always, we look for­ward to dis­pens­ing with plain­tiffs’ base­less law­suit in due course.”

The law­suit stemmed from Octo­ber 2019 and was filed by a group of investors alleg­ing that Teth­er and cryp­tocur­ren­cy exchange Bitfinex engaged in mar­ket manip­u­la­tion by issu­ing USDT that were not backed by the U.S. dol­lar with the inten­tion of using them to pur­chase volatile cryp­tocur­ren­cies such as Bit­coin. Both Teth­er and Bitfinex have denied the allegations.

Thus far, the plain­tiff’s main objec­tives are to assess the back­ing of USDT with U.S. dol­lars and to allow a foren­sic accoun­tant to eval­u­ate the USDT reserve. This includes a review of gen­er­al ledgers, bal­ance sheets, income state­ments, cash-flow state­ments, and prof­it and loss state­ments relat­ing to Teth­er’s operations.

At the time of pub­li­ca­tion, Teth­er claims it has $68.15 bil­lion of assets (col­lat­er­al) against $67.96 bil­lion of lia­bil­i­ties (sta­ble­coins), with the vast major­i­ty of assets com­pris­ing cash and com­mer­cial paper. In the past, the firm has pub­lished results of its reserves being audit­ed by inde­pen­dent accoun­tant firms. Teth­er has recent­ly increased the scope of its sta­ble­coin issuance to the Euro, Mex­i­can Peso, the Aus­tralian Dol­lar, and the Off­shore Chi­nese Yuan.

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