- Previously, Tether attempted to block a similar request concerning reserves backing its USDT stablecoin.
- The company faces regulatory probes, including allegations by the CFTC about misleading statements regarding its reserves.
Tether and Bitfinex have opted to cease their opposition to a New York Freedom of Information Law (FOIL) request led by a group of journalists, including Zeke Faux from Bloomberg Businessweek.
Tether’s history with FOIL includes a prior instance when it unsuccessfully attempted to block a request related to reserves backing its USDT stablecoin in 2021. This inquiry delved into allegations about the adequacy of reserves between mid-2019 and early 2021, ultimately leading to a settlement after the investigation.
Tether And Bitfinex Decision
In their recent statement, Tether and Bitfinex clarified the decision not to contest the FOIL request by specific journalists, reiterating their openness to engaging constructively with journalists and regulatory authorities.
Highlighting Zeke Faux’s prior work, the companies expressed unease about certain journalistic practices that allegedly deviate from professionalism. Additionally, they noted instances of biased and inaccurate reporting by media outlets whose journalists are part of this FOIL request.
See Related: Tether Ordered To Reveal USDT Exact Backings
Tether Recent Deposit
Considering the Tether, BitFinex, and FOIL case, Tether recently deposited over $1 billion with a financial services group linked to a Tory party donor, the Financial Times reported. The deposit at the core of this disclosure has triggered a legal conflict between Britannia Financial and Arbitral International, a British Virgin Islands-based company. Tether initiated an account with a subsidiary of Britannia Financial in 2021, leading to the legal entanglement between the two entities.
Founded by Julio Herrera Velutini, Britannia Financial faced scrutiny when Herrera Velutini was charged by US authorities in 2022 over alleged bribery involving a Puerto Rican politician. Notably, Tether’s association with Britannia Financial highlighted its risk exposure and choice of financial collaborators.
Stablecoin Issuer’s History
The stablecoin issuer’s history is marred with regulatory probes, including allegations by the Commodity Futures Trading Commission regarding misleading statements about its dollar reserves backing stablecoin USDT. Furthermore, an investigation by the New York Attorney General accused Tether of concealing significant losses during a period when access to global banking was limited.
USDT, recognized as a stablecoin pegged to the U.S. dollar, boasts a substantial $87.9 billion in circulation, positioning it as the third-largest cryptocurrency globally, trailing only Bitcoin and Ethereum, according to CoinGecko data.
