New York Judge demands Tether to Prove USDT Backing

Sahana Kiran
Source – Unsplash

Despite entailing the title of the “world’s largest stablecoin” Tether [USDT] continues to drown in troubled waters. The network was slapped with a lawsuit for issuing USDT in order to pump the price of Bitcoin [BTC]. This market manipulation lawsuit has been going on for quite some time now and has taken another turn. This time, it wasn’t in favor of the stablecoin.

It was brought to light that a U.S. Judge in New York dismissed Tether’s motion that blocked the release of its financial records. Therefore, the network now has to produce an array of documents pertaining to the backing of USDT. This list includes, “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements.” In addition to this, the stablecoin firm has to present records of any transfers of crypto or other stablecoins. Minor details like the time of the transaction were also demanded.

The Judge preceding the case, Katherine Polk Failla noted how the Plaintiffs “plainly explain why they need this information: to assess the backing of USDT with US dollars.” She further added,

“The documents sought in the transactions RFPs appear to go to one of the Plaintiffs’ core allegations: that the … Defendants engaged in crypto commodities transactions using unbacked USDT, and that those transactions “were strategically timed to inflate the market.”

Additionally, it should be noted that Tether was also asked to produce information pertaining to the accounts it entails at Bitfinex, Bittrex, and Poloniex.

No place for Tether in New York

It seems like New York just isn’t the place for Tether. The platform locked horns with the New York Attorney General and both Bitfinex and Tether entered a rather expensive settlement of $18.5 million. The 22-month-long case that started in April 2019 finally came to an end.

In addition to this, the firm also affirmed that it would halt trading services for the residents of New York.

The latest news is certainly detrimental to the platform. As mentioned earlier, Tether’s attorneys suggested that presenting financial records was “incredibly overboard” and “unduly burdensome.” But the Judge clearly dismissed these notions and pointed out that these documents were pertinent to the case.