Tether is forced to expose USDT’s reserves. Tether will present evidence in a U.S. court to prove the USDT cryptocurrency’s backing. The court order is related to an ongoing lawsuit that alleges USDT’s unbacked issuances caused $1.4 trillion in market damage.
A few weeks earlier, Tether announced that it was entrusting a renowned auditor, BDO Italia, to audit its quarterly reserves. The crypto firm will very soon have the opportunity to be even more transparent about this critical information for a stablecoin.
That’s because a judge in New York, U.S., has ordered Tether, the issuer of the stablecoin USDT, to turn over its financial records in a lawsuit that alleges the company conspired to issue USDT as part of a campaign to inflate the price of bitcoin (BTC).
The court order requires Tether to turn over:
- balance sheets,
- income statements,
- statements of cash flows and
- income statements,
- records of all transactions or transfers of cryptocurrencies and other stablecoins, including information on when the transactions were made.
This court requisition follows a 2019 complaint filed against Tether. The plaintiffs accuse the stablecoin creator of issuing tokens as part of a scheme to drive up the price of Bitcoin.
Tether to disclose information about the accounts it holds with Bitfinex, Poloniex and Bittrex
Thus, they suspect that Tether issued more USDT than its reserves allowed at the time. In order to establish the truth, the firm is required to disclose its financial data. The court’s requests don’t stop there as it also requires Tether to disclose information about the accounts it holds with Bitfinex, Poloniex and Bittrex.
Tether tried, through its lawyers, to block these requests, calling them deeply disproportionate and unduly burdensome. However, the magistrate considered that these documents were essential to the prosecution.
This is not the first time that the American company has been forced to be transparent about its reserves. In a previous lawsuit, Tether agreed in 2021 to share information about its reserves for two years. The USDT issuer was also fined $18.5 million, along with Bitfinex. However, the documents produced remain confidential.
This is why Coindesk, in the name of the right to information, is claiming before the Supreme Court of the State of New York access to the precious elements. However, the American media must deal with the fierce opposition of Tether.