In a recent announcement, Tether praised the action as a significant stride towards enhanced transparency within the industry.
Tether and Bitfinex have emphasized their commitment to transparency but clarified that a complete release of all their documents is not feasible due to standard business practices. Their decision to withdraw opposition to the FOIL request, however, demonstrates their willingness to share information within certain boundaries.
This is not the first time Tether has faced a FOIL request. In June 2021, CoinDesk filed a similar request for documents related to Tether’s reserves during the New York Attorney General’s inquiry. Tether tried to block the release of the documents but lost in court. CoinDesk joined the case to advocate for the release of the documents, arguing that it was in the public interest. Tether opposed CoinDesk’s involvement, but a New York judge dismissed their opposition.
In their recent statement, Tether and Bitfinex expressed their willingness to engage constructively with journalists and regulatory authorities who adhere to ethical reporting standards and respect data privacy boundaries. They stated, “We remain open to constructive engagement with journalists and regulatory authorities who adhere to ethical reporting standards and respect data privacy boundaries.”
The Dispute Surrounding USDT
Tether’s USDT is currently the largest stablecoin globally, with a value of approximately $88.5 billion. It plays a crucial role in facilitating the global movement of funds within the cryptocurrency ecosystem.
However, concerns have been raised about the involvement of USDT in illicit activities. Zeke Faux, in his book “Number Goes Up,” highlighted instances of USDT being used in scams, including “pig butchering” scams. Notably, Tether and the U.S. Department of Justice recently announced the freezing of funds associated with such scams.
Furthermore, there has been controversy surrounding the backing of Tether’s USDT stablecoin. USDT is pegged to the value of the U.S. dollar, aiming to provide stability and reliability in the volatile cryptocurrency world. However, questions have arisen regarding the extent to which USDT is actually backed by reserves.
Tether claims that each USDT token is backed by U.S. dollars held in reserve on a one-to-one basis. However, the lack of transparent audit and regulatory oversight has fueled skepticism and led to accusations that Tether does not possess sufficient reserves to fully back all the USDT in circulation.