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US District Court Judge Orders Tether to Prove USDT Backing

Cryptocurrency Sep 21, 2022 10:00AM ET
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US District Court Judge Orders Tether to Prove USDT Backing
 
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  • New York Judge ordered Tether to submit valid documents to prove USDT backing.
  • The order followed a lawsuit against Tether, iFinex, and BitFinex.
  • The lawsuit stated that the companies manipulated the crypto market by issuing unbacked USDT.

Katherine Polk Failla, the United States District Court Judge ordered Tether to produce credible documents to prove the backing of its stablecoin USDT. Tether was ordered to submit “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements”.

The order was released on September 20, in response to a lawsuit filed by a group of investors against iFinex, Tether, and Bitfinex’s parent company, claiming that the company had issued unregistered USDT to inflate the price of other cryptocurrencies, especially, Bitcoin (BTC).

The lawsuit claimed that the companies manipulated the crypto market by engaging themselves in deceptive and anti-competitive activities for benefitting themselves. The file against the companies stated that:

The crimes committed by Tether, Bitfinex, Crypto Capital, and their executives include Bank Fraud, Money Laundering; Monetary Transactions Derived From Specified Unlawful Activities, Operating an Unlicensed Money Transmitting Business, and Wire Fraud.

Polk Failla rejected the request of iFinex to block the order considering the earlier submission of the documents which would be “sufficient enough” for the Commodity Futures Trading Commission and the New York Attorney General.

While Tether described the documents sought by the plaintiffs as “incredibly overboard” and “unduly burdensome”, the judge disagreed, saying that the documents are “undoubtedly important” as they “appear to go to one of the Plaintiffs’ core allegations.”

Previously, in September 2021, the judge dismissed the plaintiff’s case against iFinex that it manipulated the crypto market. The case was dismissed under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Additionally, there was another case against iFinex, which was settled with the Office of the New York Attorney General in February 2021, with a payment of $18.5 million to New York for the damages.

The post US District Court Judge Orders Tether to Prove USDT Backing appeared first on Coin Edition.

See original on CoinEdition

US District Court Judge Orders Tether to Prove USDT Backing
 

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